CONSERVATION-FRIENDLY ECONOMIC DEVELOPMENT IN CAMBODIA’S PROTECTED AREAS EXPLORING PRIVATE SECTOR PARTNERSHIP OPPORTUNITIES AND ENABLING POLICIES IN THE CARDAMOM MOUNTAINS THE WORLD BANK, FEBRUARY 2022 © 2022 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, col-ors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S The material in this work is subject to copyright. Because the World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Attribution—Please cite the work as follows: François, Yann; Kornexl, Werner; Sinclair, Ross. 2022. Conservation-Friendly Economic Development in Cambodia’s Protected Areas - Exploring Private Sector Partnership Opportunities and Enabling Policies in the Cardamom Mountains, Cambodia. World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank.org/handle/10986/34323 License: CC BY 3.0 IGO.” All queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. Cover photo: Lemongrass essential oil production by communities in Central Cardamoms National Park. Photo: Fauna & Flora International ii CONTENTS Acknowledgements vi Abbreviations and acronyms vii About this report viii Executive summary 1 1. The need for economic Development in Protected Areas 9 1.1. Towards conservation-friendly economic development inside PAs 13 2. The Cardamom Mountains Landscape – the largest Protected Area System in indochina 16 3. Livelihoods in the Cardamom Mountains Landscape 22 3.1. COVID-19 is impacting livelihoods in the CML 27 3.2. Climate change is the most severe threat to livelihoods in the CML 32 4. Opportunities for conservation-friendly economic development 34 4.1. Plantation forestry is a fast-growing sector in Cambodia 36 4.2. Intercropping increases opportunities for local communities 39 4.3. Switch to sustainable charcoal using plantation residues 41 4.4. Agarwood is a high-value product with a strong Cambodia brand. 43 4.5. Agroforestry and conservation-friendly agriculture 47 4.6. Livestock and chicken farming have potential as conservation-friendly activities 54 4.7. Non-timber forest products (NTFP) are at the crossroads between conservation and development 56 5. Barriers to enabling conservation-friendly economic development 66 5.1. Protected Area regulations 67 5.2.Fiscal regulation related to forest products 69 CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 5.3. Lack of security in land tenure limits investments and local opportunities 70 5.4. Inadequate skills and training of local people and weak institutional capacity 71 5.5. Higher costs to access market and infrastructure 72 5.6. Competition with the informal sector 73 6. Planning for conservation-friendly economic development 74 7. The Job creation potential of conservation-friendly economic activities 80 7.1. Framework to assess the impact of CFEA on Jobs 81 7.2. Job creation potential of the different models 82 7.3. Recommendations to increase local jobs 84 8. Recommendations for developing value chains and an enabling environment for conservation-friendly economic activities 87 8.1. Developing value chains for conservation-friendly economic activities 88 8.2. An enabling environment for conservation-friendly economic development 91 9. Appendices 102 Appendix 1 — Supplementary graphs 103 Appendix 2 — Typology of Non-Wood Forest Products by FAO 104 Appendix 3 — Principles for free, prior, and informed consent 105 iii FIGURES Cover: Lemongrass essential oil production by communities in Central Cardamoms National Park i Figure 1. Waterways in the Cardamom Mountains Landscape (CML). 10 Figure 2. The two visions of economic development. 14 Figure 3. The Cardamom Mountains landscape. 17 Figure 4. Human population distribution around the watersheds of the Cardamom Mountains. 18 Figure 5. Lack of demarcation of PAs favors competing land-uses 21 Figure 6. Forest cover change in the Cardamom Mountains Protected Areas 2010-2019. 23 Figure 7. Changes in long-rotation crops and rice cultivation 26 Figure 8. Wages from agriculture and construction, and other sources. 27 Figure 9. Remittances from domestic, and international migrants as a primary source of livelihoods in the Cardamom Mountains landscape. 28 Figure 10. Angkor Archaeological Park entry revenues 29 Figure 11. Level of debts in rural communes of the CML. 31 Figure 12. Average high daily temperature for Cambodia. 33 Figure 13. Intensive teak plantation by private company in Tasal CPA. 37 Figure 14. Acacia plantation in CamAgra plantation, Kampong Seila, Koh Kong Province. 38 Figure 15. The intercropping cycle and examples of intercropping. 40 Figure 16. Economic performance of short-rotation tree plantation with intercropping 41 Figure 17. Acacia Mangium thinning residues from Grandis Timber in Kampong Speu. 42 Figure 18. Flow of charcoal and location of producers in Phnom Aural Wildlife Sanctuary. 43 Figure 19. An example of the land cover change in CPAs that is widespread in the landscape. 44 CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S Figure 20. Potential agarwood plantation areas based on elevation. 46 Figure 21. Ibis Rice compliance monitoring system. 49 Figure 22. Community-based production bamboo incense stick in Kratie Province. 60 Figure 23. Areas suitable for the cultivations of cardamom in CML based on elevation. 62 Figure 24. Net Present Value of the Forest farming model under different discount rate. 63 Figure 25. Lemongrass essential oil in Central Cardamoms National Park. 64 Figure 26. Impacts of roads on deforestation in the CML Protected Areas 95 Figure 27. Illegal loggers crossing a pilot Teak plantation in Tasal CPA. 84 Figure 28. Comparing the number of jobs created from a medium-scale plantation with added-value from other activities potentially associated with the plantation. 86 iv TABLES Table 1. Matrix for assessing the direct impact of CFEA on jobs 81 Table 2. Job creation potential at the scale of a single CPA 83 Table 3. Income from NTFP in Tasal Community Forest before land-use change. 83 Table 4. Recommendations for developing value chains for Conservation-friendly economic activities. 89 Table 5. Recommendations on an enabling environment for conservation-friendly economic development. 93 CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S v ACKNOWLEDGMENTS The report “Conservation-Friendly Economic Development in Cambodia’s Protected Areas - Exploring Private Sector Partnership Opportunities and Enabling Policies in the Cardamom Mountains,” is a World Bank advisory product developed for the Royal Government of Cambodia (RGC) to support sustainable economic development in Protected Areas (PAs) as part of a broader strategy for sustainable management of the country’s natural capital. The advisory work was undertaken as part of a broader World Bank effort in Cambodia to provide guidance to the RGC through technical assistance and analytical and advisory services on managing its natural capital through landscape approaches. Working in the Cardamom Mountains, the Mekong Delta, and the upstream Mekong, the Bank is helping the RGC to better manage and add value to its natural capital by strengthening its links to the economy. This report is the output of rich dialogue and exchange with several institutions and individuals in the RGC as well as stakeholders from the private sector and the development sector. Particularly, Tetra Tech and partners from the USAID Greening Prey Lang project provided valuable inputs to the analysis and the report. This work is part of the technical assistance (TA) provided under the Bank’s Enhancing Environmental Sustainability and Resilience in Cambodia technical assistance program. The work was funded by a Supporting Effective Jobs Lending at Scale (SEJLS) grant program and the former Program on Forests (PROFOR). The Forest Carbon Partnership Facility (FCPF) also provided support in the final stages of this report. A World Bank team carried out this work in cooperation with Cambodia’s Ministry of Environment (MoE) and Ministry of Economy and Finance (MEF). The World Bank team would like to thank, in particular, His Excellency Sao Sopheap, Secretary of State MoE, His Excellency Hem Vanndy, Secretary of State MEF, and their dedicated teams for support in data collection and technical guidance. CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S World Bank management, including Maryam Salim, Country Manager for Cambodia; Christophe Crepin, previous Practice Manager; and Mona Sur, Practice Manager for Environment and Natural Resources and Blue Economy for East Asia and the Pacific, provided strategic guidance. The World Bank task team for Conservation-friendly Economic Development in Cambodia is led by Werner Kornexl (Senior Natural Resource Management Specialist), and Yann François (Technical Advisor), Ross Sinclair (Technical Advisor). At the time of delivery, the task team includes Maurice Rawlins (Senior Environmental Specialist), Elisabeth Steinmayr (Junior Professional Officer), Erica Honeck (UNVolunteer), George Cooper (Consultant), and Shilpa Shankar (Consultant). The World Bank team appreciates the inputs provided by World Bank peer reviewers Stephen Danyo (Sector Leader), Raian Divanbeigi (Senior Economist, Jobs Group), and Jean-Bernard Bescond (Senior Private Sector Specialist). The team thanks John Trezise and Topi Carlos for editing services. vi ABBREVIATIONS AND ACRONYMS CF Community Forestry CFEA Conservation-friendly economic activities CI Conservation International CITIES Convention on International Trade in Endangered Species of Wild Fauna and Flora CML Cardamom Mountains Landscape CSLEP Cambodia Sustainable Landscape and Ecotourism Project CPA Community Protected Area ELC Economic Land Concession EIA Environmental Impact Assessment FA Forestry Administration FAO Food and Agriculture Organization FFI Fauna & Flora International FTE Full-Time Equivalent FPIC Free, Prior, and Informed Consent FSC Forest Stewardship Council GAP Good Agricultural Practices GDP Gross Domestic Product MAFF Ministry of Agriculture, Forestry, and Fisheries MFI Microfinance Institution MLMUPC Ministry of Land Management Urban Planning and Construction MoE Ministry of Environment NGO Non Governmental Organization O D I A’ S P R OT ECT E D A R E A S NP National Park NTFP Non-Timber Forest Products NWFP Non-Wood Forest Products T I N C A M BCAMBODIA PA Protected Areas PDoE Provincial Department of Environment LANDSCAPE, PES Payment for Ecosystem Services PPP Public-Private Partnership PM E N REDD+ Reducing Emissions from Deforestation & Degradation, + the sustainable management C D E V E LO AREA of forests PROTECTED SUZ Sustainable Use Zone SLC Social Land Concession OMI ECO NSAP ToC Theory of Change D LYTONLE UNDP United Nations Development Program AND UNWTO World Tourism Organization ION-FRIEN MOUNTAINS WB The World Bank WCS Wildlife Conservation Society CO N S E R VAT CARDAMOM WS Wildlife Sanctuary   vii ABOUT THIS REPORT This report was prepared as part of ongoing support This report follows a previous report on Enabling from the World Bank to the Royal Government of Development of Ecotourism in Cambodia and several Cambodia (RGC) on livelihoods development in studies, previously commissioned by the World Bank, Protected Areas (PAs). It aims to provide support to on the prioritization of value chains for NTFPs. It the RGC in identifying new economic opportunities focuses on opportunities for economic development to develop livelihoods through the Cambodia in Community Protected Areas (CPAs) and Community Sustainable Landscape and Ecotourism Project Forestry (CF), and more generally, for people living in (CSLEP) (Box 1). The recommendations are intended buffer areas around PAs in the CML. to be practical and implementable during the lifetime of the Project. Following a chapter providing the context in Cambodia and an overview of the landscape dynamics and The Development Objective of the CSLEP is to livelihoods within it, the report outlines planning improve PAs management, promote ecotourism needs for conservation-friendly development and opportunities, and promote non-timber forest presents opportunities for Conservation-friendly products (NTFPs) in the Cardamom Mountains – economic activities (CFEA). Based on the assessment Tonle Sap area. of the barriers to establishing an enabling environment for private sector engagement, Geographical coverage of the report – While options for job creation are discussed, followed by the CSLEP project includes the Tonle Sap great recommendations for developing value chains and lake, floodplain, and foothills north of the lake, enabling conditions for private sector participation. this report focuses on the Cardamom Mountains Landscape (CML). CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S Box 1. Cambodia Sustainable Landscape & Ecotourism Project The World Bank’s International Development Association is providing a loan to the Royal Government of Cambodia for the implementation of the CSLEP project, which is led by the Ministry of Environment and the Ministry of Rural Development. The Project is financed by IDA (US$ 51 million) and GEF (US$ 4.2 million). The objectives include: Strengthening the capacity for PA landscape planning and management by developing an Information System and Decision Support, preparing PA and Community PA management plans, and providing technical assistance on a PA enforcement framework. The Ministry of Environment implements this activity. Strengthening opportunities for ecotourism and non-timber forest products (NTFP) value chains by enhancing the enabling environment for private sector engagement and by investing in infrastructure such as visitor centers, waste management, and NTFP processing and storage facilities. The Ministry of Environment (MoE) implements this activity. Improving access and connectivity through the rehabilitation of rural roads and other related rural infrastructure to help in the development of ecotourism corridors and links with main markets. viii EXECUTIVE SUMMARY 1 CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S DEVELOPING A CONSERVATION- forests provide critical ecosystem services and sources FRIENDLY ECONOMY: of livelihood for millions of people. The ecosystem services from the eastern slopes of the Cardamom OPPORTUNITIESINCAMBODIA’S Mountains, alone, represent a net present value of PROTECTED AREAS US$99 million and an annual value of US$8 million from the regulation of water flows, sedimentation control, KEY MESSAGE 1 non-timber forest products, and ecotourism revenues. Cambodia’s Protected Areas provide critical Thanks to these ecosystem services, households living ecosystem services and are key to climate change inside PAs have lower poverty rates than households in mitigation and adaptation. villages outside PAs with similar access to infrastructure. Forests in PAs are at the core of Cambodia’s climate Despite rapid economic growth in recent years, change mitigation strategy. The forests of the CML Cambodia remains a biodiversity hotspot in the store a massive amount of carbon that would be region, providing critical ecosystem services. valued at US$ 1 billion, with a carbon price of US$5/ Cambodia has one of the highest ratios, globally, of tCO2e.1 Preserving the carbon stored in these forests, territory in Protected Areas (PAs). The PAs contain rich while maintaining the ecosystem services provided, is biodiversity and ecosystems that have been largely essential for mitigating and adapting to climate change, lost in neighboring countries. These PAs also provide which is expected to have major impacts on agricultural critical ecosystem services to Cambodia’s economy in production in Cambodia. terms of water flows regulation, sedimentation control, non-timber forest products, and ecotourism revenues. Agriculture, which depends heavily on water flow KEY MESSAGE 2 regulation, erosion reduction, and nutrient retention Conservation-friendly economic development is services, generated 22% of the Gross Domestic Product needed to improve the livelihoods of communities inside PAs, which have been affected by (GDP) in 2018.1 Tourism and ecotourism, benefiting from COVID-19. the Kingdom’s spectacular landscapes and biodiversity, CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S contributed to 18% of the GDP in the same year.i Additionally, hydropower dams, which benefit from the Lack of access to markets and services makes life sedimentation control provided by forests, generated difficult for many households. Many rural people are 58% of Cambodia’s electricity production.2 landless or land poor and have difficulties accessing services. Non-timber forest products (NTFPs) and other The Cardamom Mountains landscape (CML) in forest resources provide additional income, but these southwestern Cambodia forms the largest area of sources of income are seasonal, driven by a small contiguous protected forest in Indochina. The CML number of buyers, and are declining. Rice cultivation spans five provinces and has a network of seven PAs. This is the main livelihood activity, with annual crops and area contains iconic and globally important biodiversity, permanent crops growing in importance. Wages from including the critically endangered Siamese crocodile commercial farms developed by outside investors, and (Crocodylus siamensis), the endangered pileated gibbon remittances from domestic and international migrants, (Hylobates pileatus), and the largest population of Asian are essential sources of livelihoods. Although difficult elephants in Indochina. In addition, its watersheds and 1 Maurice Rawlins et al., “Valuing the Ecosystem Services Provided by Forests in Pursat Basin, Cambodia” (Washington, DC: World Bank, 2020). The study highlights the significant economic value that intact forests and ecosystems provide for downstream water services. 2 International Energy Agency, Electricity Balance of Cambodia for 2018. 2 to quantify, illegal activities, such as poaching and have led to massive landscape transformations, logging, are also important income sources for many without always benefiting local people but significantly households, especially in case of unexpected expenses. impacting biodiversity. On the other hand, a network of innovative social enterprises has pioneered business Impacts of COVID-19 are severely felt in Cambodia, models that aim to reconcile development and generally and in the CML, with tourism being the most conservation but remain small-scale, operate partially impacted sector. The agricultural sector has been in an unregulated environment, and primarily rely upon relatively unscathed and is a pillar of resilience for donor support. households that have suffered other losses, such as reduced remittances from domestic and international The need to improve the quality of life for local migrants. Reduced household income is particularly communities and develop the economy can often concerning given the high indebtedness in the CML, with conflict with biodiversity conservation. The differences household debt often informal and collateralized by in stakeholders’ ambitions can be significant and can land titles for many households. This high level of debt, present substantial obstacles to PA conservation. combined with the income loss from COVID-19, can lead However, there are multiple pathways where these to a critical economic situation that may threaten hard- different visions can coincide. This report aims to earned conservation achievements in the landscape. explore some of these pathways, where the objectives of private actors, the government, conservation NGOs, Conservation-friendly economic activities are critical and local people can coincide for shared value creation, for creating jobs while also taking pressure off more sustainable PA management, and quality forest encroachment. Forest products have complex job creation. value chains and require value-added processes and specialized markets to become viable. In most cases, The CML benefits from a good climate for high-added- communities alone are not prepared to take advantage value production and degraded land inside PAs that of the economic potential. Private and community can be dedicated to sustainable development. The partnerships can help materialize this potential, create wide altitudinal and climatic range in the CML allows CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S jobs and income if the enabling environment is put for agricultural products that are unviable in the in place. Engaging the private sector is also critical lowland plains of the country. These favorable climatic for transitioning from illegal, unsustainable activities conditions make the CML interesting for private sector to conservation-friendly economic activities and for investment. In addition, degraded lands cannot be found creating higher quality jobs than those relying on non- in CPAs but are widely available within the Community sustainable activities. Zones and Sustainable Use Zones of PAs. Significant parts of these areas are now degraded due to the lack of management plans or demarcations, and the weak KEY MESSAGE 3 The Cardamom Mountains landscape (CML) has enforcement of PA laws. With appropriate regulatory significant private sector partnership opportunities changes, these degraded areas could be made available for conservation-friendly economic development. for conservation-friendly economic activities (CFEA) and could have good potential for community-private sector partnerships. The CML is a ‘frontier’ under severe pressure with complex social, economic, and environmental In addition, the CML is close to markets, and synergies dynamics. The recent history of economic development exist between ecotourism and CFEA. The CML is unique initiatives in PAs involves two contrasting visions. On in that it is a large wilderness area relatively close to the one hand, large-scale economic land concessions markets, such as large urban areas like Phnom Penh, 3 tourism centers like Sihanoukville, and international both companies and local communities and could be markets accessible via road, sea, and air. Furthermore, promoted in the CML. Technical support could also be existing and planned ecotourism development in the provided to improve the security of the market for the CML provides additional local markets for fresh produce second crop, which would help overcome the main and some NTFPs. barrier to the expansion of such intercropping. Promoting the processing of wood residues into KEY MESSAGE 4 sustainable charcoal could have a significant impact. Several conservation-friendly economic activities In parts of the CML, like Phnom Aural, charcoal is a could be implemented in CPAs across the major driver of forest degradation. Integrated models landscape over the next five years. that involve the processing of wood residues from thinning, harvesting, and processing into sustainable Several non-timber forest products and other charcoal could be promoted to alleviate this pressure conservation-friendly economic activities already on PAs while contributing to job creation. exist in the CML and can be brought to scale with increased engagement of private investors. There is Expanding multi-stakeholder production models expressed demand from qualified private initiatives to vegetables and fruits could bring income and with good track records, and at the same time, there is biodiversity benefits. For the domestic market, high- strong potential for job-creating value chains. quality Good Agricultural Practices (GAP) , or organic vegetables, are in high demand. Following good Several strategic actions can be undertaken to attract experiences in Cambodia, outgrower farming models the interest of investors and to facilitate community can be promoted in the CPA, especially in areas near partnerships on the ground. This requires an impartial ecotourism sites or in those that have good access to facilitation role that could be occupied by the MoE or by urban centers. For these premium markets, farmers’ other intermediaries, such as local non-governmental cooperatives need technical assistance and could organizations (NGOs) operating in the area. The increase their value creation through the provision following actions can assist in lowering the entry CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S of infrastructure, like greenhouses and cold storage. barriers for private investors in different value chains. Developing incentive mechanisms to encourage farmers to maintain biodiversity in and around plantations of Plantation forestry value chains could be developed permanent crops is recommended. Examples of such in degraded CPA areas. Short-rotation tree plantations, incentives include the expansion of the Ibis Rice model such as Acacia and Eucalyptus, with intercropping to other crops and commodities and the use of tax of agricultural crops, have good potential to provide credits, direct Payment for Environmental Services (PES) short-term and longer-term income while reducing , or grants for maintaining native tree cover. pressure on natural forests. These plantations should be developed only in highly degraded parts of CPAs Developing value chains for livestock integrated into using smallholder planting, particularly in areas where the landscape through silvo-pastoralism also has agriculture is uneconomic. More detailed mapping of the good potential. Farming premium livestock, such as CML and targeted consultation should be undertaken to indigenous pig-raising using silvo-pastoralism, could identify suitably degraded areas for such developments. provide significant benefits for all stakeholders and the environment and can also improve ecotourism Further added value could be generated by supporting experiences. Still, wildlife farming should only be intercropping value chains. Short-rotation tree considered under the strict conditions that encourage plantations with intercropping provide benefits to conservation. Chicken farming could be promoted to 4 increase the nutritional and economic well-being of CPAs, their commercialization and trade are regulated local people and to partially offset the widespread by the Forestry Law under the Ministry of Agriculture illegal hunting in CML PAs. Forestry and Fisheries. The Forestry Law requires a high number of permits and authorization to operate Several NTFPs have the potential to improve formally, which is generally beyond local community livelihoods with minimal impact on biodiversity. Wild capacity. The regulatory framework regarding forest honey production could be scaled up in the CML by products strongly favors private sector investments including better marketing and expansion of “rafter in large-scale forest plantations over sustainable beekeeping”3 in degraded areas. Conservation-friendly management of natural forests. cardamom, cultivated in the understory of degraded forests, also appears to have good potential. Conversely, In addition, the CPAs’ weak land tenure prevents long- the collection and farming of bamboo and rattan seem term investment in CFEA. Private initiatives are attracted to have low profitability, as village enterprises are by available degraded lands for economic development, without significant investment to develop the sector. but CPAs face legal constraints that make it difficult for Forest farming should not be applied in areas of high investors and partners: conservation value. In already degraded areas in the CML, however, forest farming of high-value cash crops, • Most CPAs are not yet legally established, and such as cardamom, could be planted with useful trees zones and boundaries are yet unclear, which is the contributing to ecosystem restoration. These crops prerequisite for any economic activity or long-term could also be cultivated in the understory of degraded private partnership. forests and marketed using the distinct Cambodian • The PA Law limits CPA management agreements ‘brand’. Forest farming of turmeric, ginger, and galangal to 15 years, precluding investments that require could be promoted, along with high-value tree planting. longer timeframes, such as forestry. KEY MESSAGE 5 • According to PA Law and the Guideline on Major regulatory and institutional barriers Procedure and Process for Community Protected CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S limit the development of CFEA and favor more Area Establishment, CPAs are unable to contract destructive forms of economic development, thus with anyone but the MoE. leading to land-use change and biodiversity loss. • A new directive that allows households that have The main barrier to private sector investment in been living inside PAs for 10 or more years to claim conservation-friendly enterprises is an inadequate official land title will potentially provide needed enabling regulatory framework for the PA systems. tenure security for individual families, but it also While the Protected Area Law under MoE jurisdiction has the potential to fuel land speculation and to regulates the economic activities permitted in PAs and promote the fragmentation of PAs and CPAs. 3 Rafter beekeeping aims to mimic branches of large trees by using tree poles positioned at a slight angle and easily accessible from the ground in order to attract migrating swarms of Apis dorsata. Eric Guerin, “Rafter Beekeeping - Sustainable Management with Apis Dorsata” (WWF, 2019). 5 In addition, there is a lack of definition for Community RECOMMENDATION - Improve the enabling Zones in the Protected Areas which could be dedicated environment for conservation-friendly economic to CFEA. Many PAs haven’t been properly zoned yet, and development. management plan and governance in Community Zones are still lacking. The development of management The current regulations provide a weak legal framework plans accepted by the local stakeholders could orient for the commercialization of products from CPAs. Private economic activities to essentially achieve socio- companies investing in CFEA face greater barriers than economic and conservation objectives. It would also be conventional businesses do, and they do not operate on a prerequisite to attract responsible investors in CFEA. a level playing field. A lack of transparent decision-making on private sector The following actions could be taken to remove the partnership with CPAs (and in Community Zones in PAs) barriers preventing the development of CFEA in CPAs and inadequate fiscal incentives further disincentivize and develop an enabling environment: private sector investment in conservation-friendly • The Protected Areas Law (PA Law) needs to be economic activities. Fiscal incentives to encourage amended to grant further independent legal investments — such as the Qualified Investments existences to CPAs, with the right to contract with the and exemptions from harvesting, processing, and private sector to engage in CFEA business activities transportation fees — heavily favor large-scale, often as long as they part of the CPA management plan. less sustainable plantations and other developments over smaller-scale partnerships in CFEA. The MoE would • Extending CPA agreements from 30 to 50 years need to collaborate with the Ministry of Economy and would ensure tenure rights with strengths similar Finance (MEF) and the Ministry of Commerce (MoC) to those of long-term leases, if CFEA activities are to support the CFEA development and remove these clearly identified and part of a CPA management barriers to increase the competitiveness of CFEA in plan. the market. • Changing the PA law to clarify the categories of CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S KEY MESSAGE 6 CFEA activities eligible under different levels of There is a clear road map for unlocking the degradation and providing safeguards would avoid potential of conservation-friendly development creating incentives to further increase ecosystem in PAs – policy and legislative reform, improved degradation. land tenure, improved PA planning and management, incentives for business investment, • The PA Law would also provide a legal basis for MoE and improved capacity of to issue necessary authorization for the production, local communities. transport, storage, and sales/exports of products from CFEA. The report makes recommendations with associated strategic actions to address the barriers presented • Investors complying with regulations in PAs face previously. If implemented together, these unequal competition from actors operating in recommendations will form a roadmap for conservation- the informal market. A combination of increased friendly economic activities. law enforcement targeting illegal businesses and granting incentives (tax exemptions or other measures) for qualified sustainable businesses could be considered. 6 • MoE and Provincial Department of Environment • Extensive mapping of priority areas in the CML is (PDoE) need to further strengthen their technical needed to identify areas for different value chains capacity to actively promote private community and potential synergies with existing private sector partnerships and act as “honest brokers” between investments. Before development starts, land-use private entities and communities, but also facilitate plans should be agreed upon and be reflected in the public interests and development partners the management plans, and guidelines need to (DPs). be established to determine what CFEA should be allowed at what levels of degradation. Improve land tenure security for CFEA development in CPAs. Uncertainty around land tenure is a source of • Free, prior, and informed consent by an independent conflict in PAs. Tenure for individuals inside CPAs needs third party is recommended before each investment to be addressed to take into account potential negative begins to ensure fair and equitable outcomes for impacts on customary rights. local people. Further safeguards must be provided by defining a set of criteria based on multiple • Prakas for CPAs, management plans, zoning, and benefits to assess private sector investment. demarcation would need to be completed as soon as possible for CPAs where CFEA will be developed. • Finally, in a planning framework, synergies between infrastructure for ecotourism and CFEA • The MoE could also further engage in Community development could be improved. Zones to support the development of a locally approved management plan and to support its RECOMMENDATION - Maximize the job creation implementation. potential for CFEA by strategically focusing on high priority value chains • To ensure progress is not lost due to land grabbing and other illegal activity, law enforcement in CPAs Prioritize value chains with higher local quality job must be strengthened. creation potential. The potential job creation and the quality and accessibility of the jobs vary depending on CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S RECOMMENDATION - Improve the planning the business model and opportunity costs borne to framework for conservation-friendly development. households as a result of shifting livelihood activities. The report provides some estimates of the job creation The current socio-economic dynamics, land-use potential for various CFEA at the scale of a CPA. change, and biodiversity loss in PAs require improved planning at the landscape level to guarantee long- Promote models that allow local processing to increase term outcomes from private partnerships. A proper job creation. If local processing makes financial sense planning framework is needed before conservation- and is in line with the community’s capacity, it can friendly development can be successfully implemented. significantly boost job creation at local level. The example of short-rotation tree plantations showed • To ensure fair and equitable outcomes for all that the number of jobs created could be doubled at parties, transparent procedures for private sector little cost if the residues were to be processed into engagement with MoE and local communities sustainable charcoal locally. This logic applies to need to be developed. Strategic actions required all CFEA and should be a major consideration when include establishing multi-stakeholder dialogue selecting projects. and a Theory of Change for conservation-friendly economic development in PAs and CPAs. 7 Improvement of capacity of local communities training should therefore be prioritized. Additional is important to explore job creation potential. support from the government or NGOs should be Sufficient capacity of the CPA Management Committee explored in addition. or at community level is critical for implementing community-based CFEA, which can require significant The fast development of e-commerce in Cambodia investment and labor mobilization, longer return on offers new opportunities for remote rural areas but investment, and complex benefit-sharing between requires specific skills. An assessment of required community members. training for CPAs, including skills required for engagement in CFEA, should be undertaken, followed Local communities must develop their entrepreneurial by investment in skills training and coaching to support skills to provide a broader range of services and to CPA Management Committees in the long term. improve the reliability and quality of products. Value chains where companies can complement technical CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 8 01 DEVELOPMENT IN PROTECTED AREAS THE NEED FOR ECONOMIC CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 9 Figure 1. Waterways in the Cardamom Mountains Landscape (CML) provide ecosystem services like water flow regulation and erosion control while also providing benefits and opportunities for ecotourism. Photo: Yann François MILLIONS OF PEOPLE DEPEND ON Cambodia is a biodiversity hotspot in the greater PAs THAT SUPPORT IMPORTANT Mekong region. Its relatively low population density BIODIVERSITY and large intact natural areas retain some species and CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S habitat types that have been lost from neighboring In Cambodia, millions of people depend on countries. For example, the Cardamom Mountains environmental services from the extensive network area is considered the only area in Indochina that has of PAs that also supports globally significant remained large enough for the long-term viability of biodiversity. Despite rapid economic growth in recent Asian elephants.4 years, Cambodia remains one of the poorest countries in Southeast Asia. Cambodia has made considerable Cambodia has one of the highest ratios globally of progress towards the Millennium Development Goals, the national territory in PAs. Since the Royal Decree including, among others, reducing extreme poverty. Yet, on the Creation and Designation of PAs in 1993, the most families that have risen above the national poverty Royal Government of Cambodia (RGC) has designated line have done so by small margins, and therefore, 7.5 million hectares (ha) of PAs, which constitutes 41% of they remain susceptible to adverse events, such as the the total land area.5,6 recent COVID-19 pandemic. 4 Hedges S, Fisher K, and Rose R, “Range-Wide Mapping Workshop for Asian Elephants (Elephas Maximus), Cambodia, October 2008. A Report to the U.S. Fish and Wildlife Service on Assistance Award No:98210-6-G232” (Bronx: Wildlife Conservation Society, 2009). 5 World Database on Protected Areas (WDPA) – note: several major Protected Areas such as the Southern Cardamoms National Park or Prey Lang Wildlife Sanctuary are not registered to the WDPA. 6 GDANCP, “Zoning Guidelines for the Protected Areas in Cambodia” (Phnom Penh, Cambodia: General Directorate of Administration for Nature Conservation and Protected, Ministry of Environment, 2017). 10 Up to 1 million people are living inside PAs in Cambodia.7 The communities inside PAs represent 6% of the country’s population, which is relatively high Box 2. Protected Areas and Community in comparison to other countries’ PAs. The average Protected Areas population density in PAs is 16.5 inhabitants per km2, There are nine categories of PAs in Cambodia (national park, compared to 92 inhabitants per km2 nationally.8 wildlife sanctuary, protected landscape, multi-purpose-use People inside PAs are poor but derive some benefits management area, biosphere reserve, natural heritage from the PAs. PAs in Cambodia are generally located site, marine park, Ramsar site, biodiversity conservation in remote areas with poor road access and where local corridors1,2). The MoE is responsible for managing and poverty is higher than the national average.9,10 Although supervising PAs in cooperation with other institutions. Four households living inside PAs suffer from lower access to management zones are allowed within PAs: health facilities, infrastructure, and markets, access to Core zone: areas of high conservation value with restricted forest resources allows these households to be wealthier access where use of natural resources is strictly prohibited. than those residing in similarly isolated villages outside PAs.11 These forest resources contribute between 30-42% Conservation zone: areas of high conservation value where of rural people’s total household income.12 However, access is allowed for Small-scale activities that support local factors, like proximity and access to forests and local communities such as collecting NTFPs. the level of degradation of forest resources, will impact this contribution. Sustainable use zone: areas of high economic value where infrastructure can be developed. The use of natural resource Protected Areas provide critical ecosystem services by local peoples is allowed if the areas are designated as to Cambodia’s economy worth hundreds of millions CPAs. This use is limited to collecting NTFPs and traditional of dollars annually. Forests in PAs provide numerous uses at the ‘family scale’. ecosystem services, including water storage, soil- erosion reduction, soil-fertility improvement, carbon Community zone: areas for socio-economic development CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S for local communities and indigenous peoples that may have residential lands, agricultural fields, and gardens 7 Based on GIS modeling using data from Facebook Connectivity Lab and Center for International Earth Science where land titles can be issued with MoE approval. CPAs are Information Network - CIESIN - Columbia University, “High Resolution parts of a sustainable use zones allocated to communities Settlement Layer (HRSL),” 2016, https://www.ciesin.columbia.edu/data/ hrsl/. residing within or adjacent to a PA. The community enters 8 Food and Agriculture Organization and World Bank into an agreement with the MoE for 15 years.2 Community population estimates from https://data.worldbank.org/ accessed on 15 March 2021 Forests (CFs) are a similar designation for land under the 9 World Bank, Poverty Reduction and Economic Management management of the Forestry Administration (FA) where rural Sector Unit, East Asia and Pacific Region, “Poverty Profile and Trends in Cambodia. Findings from the Cambodia Socio-Economic Survey. Report communities help manage forests and can collect timber No. 48618-KH.” (Washington, DC: World Bank, 2009). and NTFPs, including construction materials and foods.3 10 Based on a study of 40 households in three villages in three communes on the border of the Phnom Samkos Wildlife Sanctuary the ratio of poor households was of 40%, 50% and 100% compared to an average of 34% at the provincial-level. Lauren Coad, Sotheary Lim, and Lim Nuon, “Wildlife and Livelihoods in the 1 Royal Decree on the Protection of Natural Areas 1993, Cardamom Mountains, Cambodia,” Frontiers in Ecology and Evolution 7 Articles 1 & 2; (2019), https://doi.org/10.3389/fevo.2019.00296. 2 PAs Law 2008, Article 11 & 25; 11 Tom Clements et al., “Impacts of Protected Areas on Local Livelihoods in Cambodia,” World Development, Forests, Livelihoods, 3 Sub-decree on CF Management 2003, Article 3. and Conservation, 64 (December 1, 2014): S125–34, https://doi. org/10.1016/j.worlddev.2014.03.008. 12 Glen Mulcahy and Manuel Boissière, “No Forest, No NTFPs for Rural Communities in Cambodia” (CIFOR, 2014). 11 sequestration, provisioning services, recreation and subsistence livelihoods. These communities can enter tourism, and air purification (Figure 1). A recent study into agreements with the MoE to designate parts of by the World Bank showed that the ecosystem services the sustainable use zone as Community Protected provided by the Pursat watershed, situated largely in Areas (CPA). CPAs have strict rules limiting the potential the Cardamom Mountains PA system, would be worth economic income that can be derived from the forest. US$99 million alone.13 Furthermore, these forests in PAs are at the core of the RGC climate change mitigation PAs are under severe pressure from illegal activities, strategy, representing 59% of the commitment to such as logging, poaching, and land-use change. The emission reductions.14 combination of poverty, lack of livelihood alternatives, weak law enforcement, land speculation, and high OPPORTUNITIES FOR CONSERVATION market demand for wildlife and wood products have AND DEVELOPMENT EXIST, DESPITE resulted in a “tragedy of the commons” in PAs, leading SEVERE PRESSURE ON PAs FROM to encroachment, fragmentation of forest cover, and ILLEGAL ACTIVITIES AND CLIMATE the depletion of forest resources. As a result, significant parts have been heavily degraded or converted to CHANGE. agricultural production in some PAs. The preservation of ecosystem services requires Private land titles are currently being issued for land an integrated approach of innovative financing and within PAs. In July 2020, the RGC published a circular the creation of local jobs and income. Payments for allowing households that had been living inside PAs for Ecosystem Services (PES) is a relatively new concept more than 10 years to claim a land title.17 This reinforced in Cambodia. However, PES for water and REDD+15 in a directive issued by the RGC in May 2012, which was Cambodia – including REDD+ in the CML – have shown aimed at expediting the systematic issuance of private interesting and concrete results, but they are not yet at land titles.18 This directive resulted in over 1 million ha a large enough scale to support local communities in of land excised from state land – including 125,000 ha their livelihoods. from PA – and allocated to over 317,000 families.19 At the CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S PA laws and regulations offer opportunities for time of the report, it is not yet clear how much land will conservation and development. PA Laws in Cambodia be transferred from MoE-administered PAs to provincial have strict regulations to “… ensure management, governments, which will then be in charge of individual conservation of biodiversity, and sustainable use of land titling. This process might have both positive and natural resources in protected areas”. Several zones 16 negative impacts. It will certainly help clarify land are defined within PAs, ranging from those under tenure in PAs and CPAs, but it also has the potential to strict protection to those allowing economic activity increase land grabbing. (Box 2). However, local people are permitted to remain inside PAs and to continue to practice traditional 13 Maurice Rawlins et al., “Valuing the Ecosystem Services Provided by Forests in Pursat Basin, Cambodia” (Washington, DC: World Bank, 2020). 14 “Cambodia’s Updated Nationally Determined Contribution” (Phnom Penh, Cambodia: The General Secretariat of the National Council for Sustainable Development/Ministry of Environment, the Kingdom of Cambodia, 2020). 15 Reducing Emissions from Deforestation and forest Degradation, plus the sustainable management of forests. https://redd.unfccc.int/ 16 Protected Areas Law 2008, Article 1. 17 Circular 06 “Granting State Property to Citizens and Civil Servants”. 18 rective 01BB: Measures Reinforcing and Increasing the Efficiency of the Management of Economic Land Concessions. 19 Jean-Christophe Diepart, “The Fragmentation of Land Tenure Systems in Cambodia: Peasants and the Formalization of Land Rights,” Land Tenure & Development - Country Profile N°6 (AFD (French Development Agency), June 2015). 12 Current climate change scenarios project severe impacts on food production and massive population displacement in the region.20 The loss of these The dynamics that drive land-use change and ecosystem services provided by PAs from illegal activity biodiversity loss can be addressed, to a large extent, and legal titling may exacerbate these pressures. by promoting conservation-friendly livelihoods. In Therefore, the need to provide better jobs and income several places, the agro-climatic conditions could for the local population by developing and promoting allow farmers to engage in high-added-value crop conservation-friendly models of economic development production, which would not be possible in other parts in PAs is more urgent than ever. of the country. However, most households living in PAs lack capital, time, market access, and the technical knowledge to engage in higher added-value crops. 1.1.TOWARDS CONSERVATION- With longer distances to markets, remote farmers also FRIENDLY ECONOMIC tend to rely on a small number of traders who dictate DEVELOPMENT INSIDE PAs prices and production. Besides, small-scale farmers are generally unable to compete against larger farms with more intensive practices and professionalized processes In the absence of incentives for conservation-friendly business models, the current dynamics of land-use Switching from non-sustainable activities to change and biodiversity loss are the logical pathways conservation-friendly economic activities requires a to economic development for most stakeholders. focus on value-added production. PAs are generally Like other frontier landscapes worldwide, the local located in remote areas, with little infrastructure population living in and around PAs in Cambodia and a limited number of input providers. This makes suffers from unbalanced power relationships, a lack of conventional business models inside PAs less profitable. access to financial and technical resources, aversion to On the other hand, many PAs benefit from specific risk and long-term ventures, as well as generally low conditions in terms of elevation, tree cover diversity, organizational capacity. Besides being prone to both or coastal ecosystems, allowing for high-added-value food and income insecurity, forest-based livelihoods CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S products. Overexploitation of NTFPs has also reduced typically bring a lower return on investment than non- the availability of products, and the remaining naturally forest-based livelihoods do. As a result, while CPA occurring NTFPs don’t offer the necessary scale needed members have the highest incentive to maintain the to be viable. Diversification, cultivation, and production ecosystem services provided by forests, they tend to of high value-added products are therefore essential to invest their limited resources outside the CPA. These achieving conservation-friendly economic development factors result in a perverse incentive for land-use change inside PAs and creating high-quality jobs to transition through clearing forests, and biodiversity loss through away from illegal non-sustainable livelihoods in PAs. unsustainable hunting over conservation-friendly businesses. The transition from illegal unsustainable activities to conservation-friendly economic activities requires the creation of new jobs of superior quality to those that exist in the current situation. 20 United Nations’ Intergovernmental Panel on Climate Change’s (IPCC), “Special Report on Climate Change and Land” (IPCC, 2019). 13 Figure 2. The two visions of economic development: a large-scale plantation (left) bordering a Community Protected Area (right) in the Cardamom Mountains. Photo: Yann François CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S The remote location and the lack of capacity to financing). Cambodia already has a wide range of access specialized consumer markets require good models in place, and there is increasing interest communities to partner with the private sector. in innovative ways for the private sector to support Partnerships with the private sector are increasingly PA financing22 and the development of sustainable recognized as important solutions for developing livelihoods.23 Engaging the private sector in community-based forestry enterprises. 21 However, landscape approaches to forest restoration has great this typically requires parallel public investments potential to support various livelihood alternatives in the enabling environment within PAs and CPAs while increasing biodiversity and mitigating (policies, improved social services, and sustainable climate change. 21 USAID ProLand, “A Sourcebook for Community-Based Forestry Enterprise Programming: Evidence-Based Best Practice and Tools for Design and Implementation.” (Washington, DC: USAID, 2020). 22 James E. M. Watson et al., “The Performance and Potential of Protected Areas,” Nature 515, no. 7525 (November 2014): 67–73, https:// doi.org/10.1038/nature13947. 23 Peter Kareiva and Michelle Marvier, “What Is Conservation Science?,” BioScience 62, no. 11 (November 1, 2012): 962–69, https://doi. org/10.1525/bio.2012.62.11.5. 14 CONFLICTING VISIONS BETWEEN Cambodia has one of the most active social enterprise ECONOMIC DEVELOPMENT AND networks in Southeast Asia, with many pioneering CONSERVATION IN PAs models that could be expanded and implemented in other countries around the world. Although the The recent history of private sector development smaller-scale approach may have a number of social in PAs involves two contrasting visions of economic and environmental advantages, it relies heavily on development (Figure 2). On the one hand, large-scale support from donors and can struggle to Economic Land Concessions (ELC) use economies of scale achieve sustainability. to undertake profitable agricultural activities. These ELCs have been accused of increasing inequalities24 Conflict sometimes arise between economic and driving land-use change25 with minimal positive development and biodiversity conservation. The need social impact.26 However, the situation is more nuanced, to increase the quality of life of local communities and with some companies having a greater social and develop the economy can lead to conflicting objectives environmental impact than others.27 On the other hand, with biodiversity conservation. The differences in small-to-medium-scale enterprises are focusing on stakeholders’ ambitions can be significant and present environmental and social outcomes that range from the substantial obstacles to PA conservation. However, business arms of NGOs used as vehicles to achieve their there are multiple pathways where these different mandates28 for businesses with strong visions can coincide. This report aims to explore some corporate responsibility. of these pathways, where the objectives of private actors, the government, conservation NGOs, and local people can coincide for shared value creation and more sustainable PA management. CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 24 Lisa-Marie Rudi et al., “Land Rights as an Engine of Growth? An Analysis of Cambodian Land Grabs in the Context of Development Theory,” Land Use Policy 38 (May 1, 2014): 564–72, https://doi.org/10.1016/j.landusepol.2013.12.016. 25 Kyle Frankel Davis et al., “Accelerated Deforestation Driven by Large-Scale Land Acquisitions in Cambodia,” Nature Geoscience 8, no. 10 (October 2015): 772–75, https://doi.org/10.1038/ngeo2540. 26 Christoph Oldenburg and Andreas Neef, “Reversing Land Grabs or Aggravating Tenure Insecurity? Competing Perspectives on Economic Land Concessions and Land Titling in Cambodia,” Law and Development Review 7, no. 1 (October 1, 2014): 49–77, https://doi.org/10.1515/ldr-2014-0014. 27 Michael B. Dwyer, Emily Polack, and Sokbunthoeun So, “‘Better-Practice’ Concessions?: Lessons from Cambodia’s Leopard-Skin Landscape,” in Large-Scale Land Acquisitions, ed. Christophe Gironde, Christophe Golay, and Peter Messerli, Focus on South-East Asia (Brill, 2016), 205–28, https:// www.jstor.org/stable/10.1163/j.ctt1w76v19.16. 28 Tom Clements et al., “Payments for Biodiversity Conservation in the Context of Weak Institutions: Comparison of Three Programs from Cambodia,” Ecological Economics, Special Section - Payments for Environmental Services: Reconciling Theory and Practice, 69, no. 6 (April 1, 2010): 1283–91, https://doi.org/10.1016/j.ecolecon.2009.11.010. 15 CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 16 02 INDOCHINA LANDSCAPE – THE LARGEST PROTECTED AREA SYSTEM IN THE CARDAMOM MOUNTAINS THE CARDAMOM MOUNTAINS The PAs in the CML constitute the largest protected LANDSCAPE IS LARGE, BIODIVERSE, forest area in Indochina and the second largest in the AND PROVIDES CRITICAL ECO-SYSTEM entire Indo-Burma Hotspot.30 The Cardamom Mountains Rainforest is a distinct ecoregion,31 with a tropical, moist SERVICES broadleaf forest that is among the most important The Cardamom Mountains landscape (CML), in landscapes for biodiversity conservation in mainland southwestern Cambodia, spans five provinces and Southeast Asia. It is widely recognized as a biodiversity seven PAs. The landscape includes Koh Kong, Kampong hotspot and home to at least 52 globally threatened Speu, Kampong Chhnang, Pursat, and Battambang species, including the world’s largest populations of the Provinces, and 1.6 million ha of PAs, including national critically endangered Siamese crocodile (Crocodylus parks (Central Cardamoms, Southern Cardamoms, siamensis), the endangered pileated gibbon (Hylobates Kirirom, Wildlife Sanctuaries, Phnom Aural, Phnom pileatus), and the largest population of Asian elephants Samkos, Peam Krasop, and Tatai) (Figure 3). Within in Indochina with the longest wild elephant trail in Asia.32 these PAs are 39 Community Protected Areas (CPAs), The landscape is also home to numerous endemic bird, representing 45,000 ha,29 located primarily in the Phnom amphibian, reptile, and plant species. Aural and Phnom Samkos Wildlife Sanctuaries. Figure 3. The Cardamom Mountains landscape showing the five provinces, seven Protected Areas and 39 Community PAs. CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 29 Source: Ministry of Environment, Community Protected Areas Database System, accessed on 28th February 2021 30 The biodiversity hotspots are 36 areas worldwide that contain more than half the world’s terrestrial biodiversity on less than 3% of the Earth’s land surface. The Indo-Burma Hotspot stretches from the eastern slopes of the Himalayas through Burma and Thailand to Indochina. 31 Ecoregions are geographically defined areas contain characteristic, geographically distinct assemblages of natural communities and species that are distinct from that of other ecoregions. The Cardamom Mountains rain forests (ecoregion IM0106) is one of 200 worldwide priority ecoregions for conservation. David M. Olson and Eric Dinerstein, “The Global 200: Priority Ecoregions for Global Conservation,” Annals of the Missouri Botanical Garden 89, no. 2 (2002): 199–224, https://doi.org/10.2307/3298564. 32 Thomas Gray et al., “Status and Conservation Significance of Ground-Dwelling Mammals in the Cardamom Rainforest Landscape, Southwestern Cambodia,” Cambodian Journal of Natural History 2017 (July 12, 2017): 38–48. 17 Figure 4. Human population distribution around the watersheds of the Cardamom Mountains. Watersheds and forests in the CML provide critical Aural and Phnom Samkos Wildlife Sanctuaries contain ecosystem services. The wide altitudinal range of the two-thirds of the total population residing inside PAs. Cardamom Mountains – from sea level to Cambodia’s The Peam Krasop Wildlife Sanctuary hosts the highest highest peak 1,813 m. (Figure 4) – has broad climatic population density, with 24.2 inhabitants per km2; 95% and geographic features and a vast area of intact forest, of people live below 250 m a.s.l. (Appendix 1, Fig. A). resulting in a wide range of ecosystem services. A recent study by the World Bank, as part of the CSLEP project, Communities are heterogeneous, consisting of calculated the ecosystem services provided by the indigenous groups, ex-Khmer Rouge, newly arrived CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S Pursat watershed. The eastern slopes of the Cardamom domestic migrants from different places in Cambodia, Mountains, alone, have a net present value of US$99 as well as powerful elites. At the local level, complex million and an annual value of US$8 million from the relationships exist between ex-Khmer Rouge, who regulation of water flows, sedimentation control, non- often are village chiefs and control local land timber forest products, and ecotourism revenues. 33 allocation, landless domestic migrants looking for land and resources, investors, provincial businessmen, A RELATIVELY SMALL POPULATION, indigenous people, and the government. This complex MOSTLY LIVING OUTSIDE PAs and unequal social structure is derived from a traumatic history and new economic opportunities that have 333,000 people are living in and around the PAs in the shaped the social landscape. Today, the CML is one landscape. The PAs are relatively unpopulated, with of the major “frontiers” in Cambodia, where complex only 76,000 people (23%) living inside PAs34 and less economic, social, and environmental dynamics shape than half of those, about 8,461 families, involved in this landscape’s future. CPA management as registered CPA members.35 Phnom 33 Maurice Rawlins et al., “Valuing the Ecosystem Services Provided by Forests in Pursat Basin, Cambodia” (Washington, DC: World Bank, 2020). 34 GIS analysis using data from Facebook Connectivity Lab and Center for International Earth Science Information Network - CIESIN - Columbia University, “High Resolution Settlement Layer (HRSL),” 2016, https://www.ciesin.columbia.edu/data/hrsl/. 35 Ministry of Environment, Community Protected Area database. 18 A NEW FRONTIER – THE HISTORICAL It is only since 1998, when the Khmer Rouge military AND SOCIAL DYNAMICS OF THE CML and the central government came to a negotiated agreement, that these lands became accessible to the Sustainable landscape management requires general population and other international actors. understanding the past dynamics that have shaped Nevertheless, the number of mines restricted access the social landscape, followed by an exploration of to many parts of the landscape. (See Box 3 for a brief potential pathways. 36 history of recent land tenure in Cambodia). Cambodian land-use and land rights issues are Post-conflict, the CML became a new frontier, where complex. That is especially true for the CML, where land land and natural resources were available for economic tenure has been changing with each step of Cambodia’s development by migrant landless populations as traumatic modern history. well as powerful elites, while at the same time, many international conservation NGOs arrived in Major social-political struggles since French this conservation hotspot. With new arrivals into the colonization have marked land issues in the landscape in the early 2000s, the pressure on access to Cardamoms.37 In 1970, the bombing from the Vietnam land increased, and people from the lowlands migrated war, combined with the Khmer Rouge revolution, led to higher elevations looking for land and many people to abandon their land. The CML remained natural resources. a major Khmer Rouge stronghold until the late 1990s. Box 3. A brief history of recent land tenure in Cambodia French colonial period and the instauration of private property — Before the French Protectorate (1863 – 1953), Cambodia was not yet a territory defined by boundaries. Most of the population was living in Prey (forest in Khmer language) with little connection to the central state, and the rest of the population was living from rice farming close to the ports and other trade areas. The French CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S regime introduced different types of land tenure, as well as a cadastral regime, which encountered resistance and was not effectively implemented. Over-taxation of farmers and the unequal land distribution between the elite and the smallholder farmers led to an increase in tension with the colonial power. Cambodia gained its independence in 1953, but land issues continued to rise. The large amount of land accumulated by a small number of landlords caused poor farmers to struggle to access property. The number of landless farmers doubled from 10% to 20% between 1960 and 1970. Increasing inequalities created a class struggle between the elite and the peasants who represented 80% of the total population. The rise and fall of the Khmer Rouge — In 1970, less than two decades after its independence, Cambodia entered a civil war and a long-lasting political turmoil. As an increasing portion of the country became unsafe, people started migrating to Phnom Penh. At that time, a considerable amount of agricultural land was abandoned. During the Khmer Rouge administration (1975-1979) people were relocated to rural areas, family structure broke apart, most of the pre-existing state structure and private property rights were eradicated, and all the documentation created before the regime was destroyed. 36 Claude A. Garcia et al., “The Global Forest Transition as a Human Affair,” One Earth 2, no. 5 (May 22, 2020): 417–28, https://doi.org/10.1016/j. oneear.2020.05.002. 37 Sopheak Chann, “Making Place and Creating Frontiers: Examining Land and Resource Struggles in Cambodian Post-Conflict Resource Landscapes,” The Geographical Journal, November 13, 2019, https://doi.org/10.1111/geoj.12340. 19 Vietnamese occupation — In 1979 the Vietnamese invaded pushing the Khmer Rouge to the North and West of the country. During the Vietnamese occupation, land was first distributed to groups of 5 to 10 households, although local people preferred private ownership. Many households who had not returned to their land lost claim on it once back. Transitioned to democracy — In 1991, Cambodia transitioned to democracy but the Khmer Rouge maintained strongholds, including in the Cardamoms Mountains: Aural (Phnom Aural WS), Phnom Srouch (Kirirom NP), Thma Bang (Southern Cardamoms NP), Veal Veng (Central Cardamoms NP), Koas Kralor and Samlot (Phnom Samkos WS). Without international support, the Khmer Rouge were dependent on logging and natural resource extraction as a major source of income. Their influence lasted nearly 30 years in the Cardamom Mountains until the dissolution of their last strongholds in the late 1990s. Adapted from Sopheak Chann, “Making Place and Creating Frontiers: Examining Land and Resource Struggles in Cambodian Post-Conflict Resource Landscapes,” The Geographical Journal, November 13, 2019 FORMALIZED TENURE PUT INCREASING The Cardamom Mountains Protected Areas system PRESSURE ON LAND AND CAUSE still lacks agreed zoning and demarcation. This makes CONFLICT AMONG STAKEHOLDERS the entire area still vulnerable to land grabbing and encroachments. Despite the effort of conservation Land reforms defined new tenure arrangements. In NGOs and MoE, the boundaries and zones are not yet 2001, the state introduced a new land law categorizing final. Finalizing demarcation has become one of the lands into state-public land, state-private land, main objectives of the IDA-financed CSLEP. individual-private land, and indigenous/communal Large areas of forest have been converted to other CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S land. The law extended land ownership to agricultural land and legalized land concession in state-private land-uses. 90,000 ha of forests were converted to other land through the Economic Land Concession (ELC) or land-uses between 2010 and 2019 within CML PAs (Figure Social Land Concession (SLC). ELCs were granted to 6). This trend is expected to continue in the near future companies for agro-industrial development inside the with the reclassification of 127,000 ha of PA land in Koh same PAs (Figure 5). The lack of land-use planning and Kong to grant ownership to local people38 and a circular consultations with communities in the past led to some allowing households that have been living inside PAs for tension between the local population, conservation ten or more years to claim official land titles.39 Despite NGOs, and private companies. significant concerns that these programs may fuel land grabbing40, they could also increase tenure security for the many farmers lacking land titles. These programs might also help to finally reach an agreement on the boundaries of the PA system. 38 Sub-decree No. 30 on the land reclassification of 126 928.39 hectares in 8 natural protected areas in Koh Kong province as the state private property in order to grant ownership to citizens and to Koh Kong provincial administration to occupy as private state property. 39 Circular 06 on Measures and Criteria of Granting State Property to Citizens and Civil Servants. 40 The Great Koh Kong Land Rush: Areas Stripped of Protection by Cambodian Gov’t Being Bought up,” Mongabay Environmental News, October 7, 2021. 20 Figure 5. Lack of demarcation of PAs favors competing land-uses The lowlands are at exceptionally high risk of being speculation and land grabbing. The COVID-19 crisis converted to agricultural lands. Many CPAs also also put more pressure on natural resources. A recent suffer from a high level of land degradation, lack of assessment in Prey Lang41 indicated that 70% of land demarcation, and prevalent poverty among local communities observe increased illegal extraction due communities, making CPAs vulnerable to land to lack of income and jobs. CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 41 “USAID Greening Prey Lang Rapid Assessment. COVID-19 Impacts on Community Livelihoods and Natural Resources.” (Burlington, Virginia, USA: Tetra Tech, July 2020). 21 CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 22 03 LIVELIHOODS IN THE CARDAMOM MOUNTAINS LANDSCAPE This section provides an overview of the primary reliance on illegal activities to pay fees. Access to sources of livelihoods covering all the communes in markets is limited, making many households dependent PAs in the CML. Given the high heterogeneity, it presents on a handful of traders who control prices. a simplified view of a complicated situation, and aims to support the design of more in-depth studies rather The degree of poverty in the more remote areas of the than provide a comprehensive livelihood assessment. landscape is significantly higher than in other rural areas. For example, in 2013 in a study of households RELATIVELY POOR AND AT-RISK on the border of the Phnom Samkos Wildlife Sanctuary, HOUSEHOLDS LACK ACCESS TO the average gross income per household per year was NATURAL RESOURCES US$2,000, ranging from US$6,500 per year to only US$80 per year for the poorest households.42 This compares to Lack of access to markets, healthcare, and other the national figure of rural income of US$3,465 in 2014.43 services makes life difficult for many households. Poor road conditions and other infrastructure in the CML put Many rural people are landless or land poor. It is households at risk in several ways. Lack of access to estimated that 25% of the rural poor in Cambodia are healthcare facilities causes high exposure to diseases landless, with 40% classified as land poor with less and illnesses, such as malaria and dysentery. Due to the than 0.5 ha per household, indicating that they cannot lack of savings, few income-generating activities, and produce enough food for subsistence.44 medical expenses can force households into debt or Figure 6. Forest cover change in the Cardamom Mountains Protected Areas 2010-2019. Purple shading shows a change from forest to non-forest. CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 42 A study of 40 households in three villages in three communes on the border of the Phnom Samkos Wildlife Sanctuary. Lauren Coad, Sotheary Lim, and Lim Nuon, “Wildlife and Livelihoods in the Cardamom Mountains, Cambodia,” Frontiers in Ecology and Evolution 7 (2019), https://doi. org/10.3389/fevo.2019.00296. 43 Report of Cambodia Socio-Economic Survey 2019/20. National Institute of Statistics Ministry of Planning Phnom Penh, December 2020. Based on exchange rate of Riel: USD 1:0.00025. 44 Dorith v. Behaim, Marlis Lindecke, and Christian Henckes, “Foreign Direct Investment (FDI) in Land in Cambodia,” Division 45 - Agriculture, Fisheries and Food (Eschborn: GIZ, December 2009). 23 Access to NTFPs and other forest resources provides THE IMPORTANCE OF AGRICULTURE IN some additional income and increased resilience to LIVELIHOODS VARIES ACROSS external shocks. Recent impact evaluations for PAs in THE LANDSCAPE Cambodia have shown that households living inside PAs have lower poverty rates than households in villages The significance of agriculture47 as a source of outside PAs with similar access to infrastructure. 45 livelihood varies across the landscape. At the However, reliance on forest resources, even if only national level, agriculture is the primary source of for additional income, involves risk, particularly with livelihood in the landscape. Agricultural activity rapidly changing land-use dynamics and the impacts of sustains the communities located in the periphery climate change. of the landscape. In these communities, paddy and temporary crops predominate. In the more forested Income-generating opportunities are influenced center of the landscape, livelihoods are more balanced by several factors, including altitude and access to between agriculture and other activities, and paddy markets. The extensive altitudinal range in the CML and temporary crops are less dominant. In terms of profoundly affects income generation opportunities, how these patterns relate to the PAs in the landscape, with substantial variation in temperature and rainfall while agriculture is the dominant source of livelihoods across the landscape affecting crop yield. In addition, around the Phnom Aural and Phnom Samkos Wildlife livelihood opportunities in these remote areas are Sanctuaries, its importance decreases in the Central and driven by existing value-chains and traders’ requests. Southern Cardamoms National Parks. In Peam Krasop Wildlife Sanctuary, fisheries are the primary source Main livelihoods in the landscape include agriculture, of livelihood. forest products, salaried work, fisheries and aquaculture, and livestock. The most important Subsistence agriculture is more predominant in the livelihood activities for households vary across West, commercial agriculture more in the East of the the landscape, but an overwhelming proportion of landscape. While households engage in agriculture households are involved in agriculture in some form. mainly for home consumption (‘subsistence’) around CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S For families in the northern Cardamom Mountains, Phnom Aural Wildlife Sanctuary and Kirirom National crops are the primary source of cash income (62%) and Park on the western side of the landscape, in other parts non-cash income (41%). For cash income, salaried work of the landscape, agriculture is more targeted towards (15%), forest products (12%), livestock (9%), and fishing market production. This is particularly the case in the (2%) were also significant. Forest products (37%), fishing Phnom Samkos and Peam Krasop Wildlife Sanctuaries (16%), and livestock (7%) were important for in the East of the landscape. The Central and Southern non-cash income.46 Cardamoms National Parks in the forested center of the landscape show a lower intensity of agriculture with more balanced production, where half of the households are engaged in commercial agriculture and the other half in subsistence agriculture. 45 Tom Clements et al., “Impacts of Protected Areas on Local Livelihoods in Cambodia,” World Development, Forests, Livelihoods, and Conservation, 64 (December 1, 2014): S125–34, https://doi.org/10.1016/j.worlddev.2014.03.008. 46 A study of 40 households in three villages in three communes on the border of the Phnom Samkos Wildlife Sanctuary. Cash-income (62%) included 35% for corn (maize). Non-cash income from crops (41%) included 13% garden products and 12% rice, and from forest products (37%) included 10% firewood, 6% fruit and vegetables and 4% wild meat). Lauren Coad, Sotheary Lim, and Lim Nuon, “Wildlife and Livelihoods in the Cardamom Mountains, Cambodia,” Frontiers in Ecology and Evolution 7 (2019), https://doi.org/10.3389/fevo.2019.00296. 47 In terms of livelihoods, agriculture is defined here as households engaged in crop production on more than 0.03 ha and/or with livestock production of at least two large livestock and/or three medium livestock and/or 25 poultry. “Temporary crops” refers to short-rotation crops such as maize, cassava, turmeric, or pumpkin. “Permanent crops” refers to things such as mango, durian, and banana. 24 RICE CULTIVATION IS AN ESSENTIAL ILLEGAL ACTIVITY IS IMPORTANT BUT LIVELIHOOD ACTIVITY DIFFICULT TO QUANTIFY Rice cultivation remains the main livelihood activity There is little quantitative data on the importance for around half of the adult population. Based on data of illegal activities for livelihoods. The contribution from Commune Database , rice cultivation is declining, 48 of illegal activities, such as logging, charcoal nationally and in the CML (Figure 7). Still, it remains an production, and poaching to household income is important livelihood activity and the primary source of difficult to quantify, given the sensitivity of the issue livelihood in the lower altitude areas of the landscape. for respondents. Still, qualitative reports indicate that Temporary crops are important for a small proportion it is widespread. Conservation NGOs have reported of households. that income from logging was a significant barrier to engaging households in conservation-friendly income TEMPORARY CROPS ARE IMPORTANT generation activities, which tend to be less lucrative and FOR A SMALL PROPORTION have a longer and uncertain return on investment. One OF HOUSEHOLDS study adjacent to a PA did not ask about illegal logging, but households reported wildmeat being 2% and 4% of The cultivation of short-rotation crops, or temporary the cash and non-cash income, respectively.49 crops, such as maize, cassava, turmeric, and pumpkin, is important for a small but stable proportion Charcoal production is significant and relies on of households in the landscape. Temporary crop illegally gathered timber. According to the Agricultural production is especially crucial in Phnom Samkos, Census 2013, more than 27,000 households are involved Phnom Aural Wildlife Sanctuary, and the Central and in charcoal production, besides agricultural activities, Southern Cardamoms National Parks. for Battambang, Pursat, Kampong Chhnang, Kampong Speu, and Koh Kong provinces, only.50 Considering that PERMANENT CROPS SEEM TO BE a significant proportion of charcoal producers are not INCREASING IN IMPORTANCE engaged in agriculture, the actual figure is likely CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S significantly higher. Cultivation of permanent crops is a source of livelihood for an increasing number of households in the landscape. Between 2011 and 2017, the proportion of farmers relying on permanent crops, such as mango, durian, banana, and longan, has been steadily increasing (Figure 7). This livelihood activity is especially important in the Central and Southern Cardamoms National Parks, Phnom Aural, and Peam Krasop Wildlife Sanctuaries. 48 Commune Database, NCDD. http://db.ncdd.gov.kh/ 49 A study of 40 households in three villages in three communes on the border of the Phnom Samkos Wildlife Sanctuary found 80% of households hunted at least 38 different mammal, bird, and reptile species. For most households hunting was to prevent crop-raiding, or opportunistically, rather than to supply the commercial trade. Lauren Coad, Sotheary Lim, and Lim Nuon, “Wildlife and Livelihoods in the Cardamom Mountains, Cambodia,” Frontiers in Ecology and Evolution 7 (2019), https://doi.org/10.3389/fevo.2019.00296. 50 National Institute of Statistics and Ministry of Agriculture, Forestry and Fisheries, “Agricultural Census 2013” (Phnom Penh, Cambodia: Ministry of Planning, December 2015). 25 Figure 7. Changes in long-rotation crops (left) and rice cultivation (right) as (a) primary, and (b) second livelihoods for communes in Cambodia and the Cardamom Mountains landscape. Long-rotation crops cultivation as main livelihood Evolution rice cultivation as main livelihood 5.5 Percentage of the population (18+) Percentage of the population (18+) CMTS CMTS Cambodia 56 Cambodia 5.0 54 4.5 52 4.0 50 3.5 48 3.0 46 2.5 44 2011 2012 2013 2014 2015 2017 2011 2012 2013 2014 2015 2017 Years Years Long-rotation crops cultivation as second livelihood Evolution rice cultivation as second livelihood 4.0 15 Percentage of the population (18+) Percentage of the population (18+) CMTS CMTS Cambodia 14 Cambodia 3.5 13 3.0 12 2.5 11 10 2.0 9 1.5 8 7 2011 2012 2013 2014 2015 2017 2011 2012 2013 2014 2015 2017 Years Years Data: Commune Database, NCDD COLLECTION OF NTFP IS SEASONAL, Communities that rely on NTFPs are also likely to be CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S BUYER-LED, AND IN DECLINE among the most vulnerable, including landless and marginalized communities. Similar to the previous section, the importance of the collection and processing of non-timber forest products, WAGES AND REMITTANCES ARE here understood as Non-Wood Forest Products (cf. IMPORTANT SOURCES OF INCOME chapter on NTFP), remains widely unknown. A review of existing literature seems to indicate that it is a very The development of commercial farms by outside seasonal, often buyer-led activity, and is generally in investors is increasing the significance of labor decline. Numerous reports also indicate that NTFP wage as a source of income. Between 2011-2017, the production is decreasing in many areas due to forest percentage of households with wages as the main degradation and deforestation. livelihood source more than doubled, with growth in agriculture, construction, and other wages (Figure 8). A small fraction of the population relies on NTFP for This source of income is especially important for the their livelihoods. Less than 2% of households in the landless members of the community who mainly rely on CML have NTFP as their primary livelihood, with a similar daily labor for their livelihoods. percentage reporting it as a secondary livelihood. 26 Figure 8. Wages from (a) agriculture and construction, and (b) other sources as a primary source of livelihoods in the Cardamom Mountains landscape. Wage in agriculture and construction as main livelihood Other wage as main livelihood 6.0 12 Percentage of the population (18+) CMTS CMTS Percentage of the population Cambodia Cambodia 5.5 10 5.0 8 4.5 6 4.0 4 3.5 2 2011 2012 2013 2014 2015 2017 2011 2012 2013 2014 2015 2017 Years Years Data: Commune Database, NCDD Remittances from domestic and international migrants represented 40% of the foreign direct investment, has are also a significant and fast-growing source of significantly affected the construction sector. income. The remittances from household members leaving the landscape to work in the construction The COVID-19-induced economic crisis is at risk of industry, the garment industry, or in a fishery serve as reversing years of development gains in Cambodia. the primary livelihood source for 10% of households While Cambodia’s real gross domestic product (GDP) in the landscape (Figure 9). This source of livelihood is growth was at 7.1% in 2019, it decreased significantly likely to have been especially impacted by the COVID-19 to -3.1% in 2020 (however, it is also projected to have crisis, as these industries have been hit hard by a recovery of 4% in 2021). As a result, employment the crisis. declined by over 13% in 2020, despite an unprecedented intervention by the RGC accounting for 5 percent of CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S GDP.51 Such a recession has not occurred in Cambodia in 3.1. COVID-19 IS IMPACTING more than 30 years. LIVELIHOODS IN THE CML Labor income has been a significant driver of poverty reduction in Cambodia. However, most of the people Impacts of the global economic crisis are expected to who escaped poverty did so by a little margin, and The be severely felt in Cambodia. The three pillars of the World Bank estimates that around 4.5 million people Cambodian economy — tourism, manufacturing exports, remain near-poor and vulnerable to falling back into and construction— have been profoundly impacted by poverty when exposed to economic and other external COVID-19. These pillars represented nearly 40% of the shocks. Particularly, it is estimated that the economic paid employment in 2019. Initially, the tourism sector slowdown brought about by COVID-19 could lead to an in Cambodia was impacted the most. As the pandemic increase in poverty of between 5.4 and 6.0 percentage continued, postponement and cancellation of garment points in the absence of significant mitigation and footwear orders severely affected the garment measures. (This estimate was established prior to the industry as well. More recently, the reduction of current COVID-19 outbreak in Cambodia, which began in foreign direct investment, especially from China, which 51 World Bank Cambodia Economic Update, Dec 2020: Cambodian Economy Hit Hard by Pandemic but Projected to Recover in 2021 27 Figure 9. Remittances from (a) domestic, and (b) international migrants as a primary source of livelihoods in the Cardamom Mountains landscape. Domestic migration as main livelihood International migration as main livelihood 10 CMTS CMTS 7 Percentage of the population Percentage of the population 9 Cambodia Cambodia 8 6 7 5 6 5 4 4 3 3 2 2 2011 2012 2013 2014 2015 2017 2011 2012 2013 2014 2015 2017 Years Years Data: Commune Database, NCDD February 2021, and represents the worst outbreak since and restaurants— decreased. Similarly, the closure of the pandemic’s onset. Therefore, it is likely that this processing factories and borders led to a price decrease estimate understates the full impact of the crisis). for products like mango54 and cashew.55 Despite this, compared to other sectors, the agricultural sector has Livelihoods in the CML are likely to be impacted. been relatively unscathed and is a pillar of resilience The loss of direct income from the agricultural sector, for households suffering from job losses and other as well as the loss of remittances from domestic and decreases in income. international migrants working in affected sectors such as the tourism, construction, and garment sectors, will THE TOURISM SECTOR IN CAMBODIA impact households in the CML. For example, income HAS BEEN THE MOST HEAVILY from migrant household members declined by 42% in IMPACTED BY COVID-19 CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 2020 compared to the pre-COVID-19 outbreak.52 Tourism represents 33% of the GDP in Cambodia COVID-19 IMPACTS ON THE and accounts for millions of jobs. Direct, indirect, AGRICULTURE SECTOR HAVE BEEN and induced employment from the tourism sector is VARIABLE estimated at 2.9 million jobs in Cambodia.56 The impact of COVID-19 on the tourism sector is illustrated by the The impact of COVID-19 on the agricultural sector crash in sales of tickets to Angkor Wat, from over US$10 depends on the product. On the one hand, exports million in January 2020 to a few thousand dollars from of jasmine rice have increased53, whereas demand April 2020 until now (Figure 10). for high-quality vegetables — purchased by hotels 52 Sodeth Ly et al., “Cambodia Economic Update : Restrained Recovery - Special Focus Adapting to COVID-19 in an Uncertain World,” Cambodia Economic Update (Washington, DC: World Bank, 2020). 53 “Cambodia in Quarantine: A Return to the Fields,” Southeast Asia Globe, August 11, 2020, https://southeastasiaglobe.com/a-return-to-the- fields/. 54 “Agriculture Ministry to Look into Declining Mango Prices,” Khmer Times (blog), April 12, 2020, https://www.khmertimeskh.com/712217/ agriculture-ministry-to-look-into-declining-mango-prices/. 55 “USAID Greening Prey Lang Rapid Assessment. COVID-19 Impacts on Community Livelihoods and Natural Resources.” (Burlington, Virginia, USA: Tetra Tech, July 2020). 56 World Travel and Tourism Council (UNWTO) 28 Figure 10. Angkor Archaeological Park entry revenues showing a 99% drop in the last 12 months compared to 2019. $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- January February March April May June July August September October November December January February March April May June July August September October November December January February March 2019 2020 2021 Source: Angkor Enterprise Domestic tourism has increased, but not by enough to is likely to lead to a higher demand for ecotourism.58 save some businesses. The low numbers of COVID-19 However, many ecotourism sites remain at risk, with cases in Cambodia led to a rise in domestic tourism and many actors in the value chain being negatively a quick recovery of the local tourism sector. However, impacted (e.g., taxi and bus drivers, souvenir vendors, the impact on the industry has been very severe, and guides, etc.). While some ecotourism actors may survive many actors might not be able to survive a long-term due to domestic tourism, the loss of direct income and drop in tourism. Globally, international arrivals dropped remittances from the tourism sector will likely have a by 74% in 2020, with an 84% drop in the Asia-Pacific substantial impact on the landscape. region.57 Industry experts do not expect any rebound before 2022. IMPACTS FROM COVID-19 ON THE MANUFACTURING AND CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S Ecotourism remains in a fragile state but is predicted to CONSTRUCTION SECTORS WILL bounce back. The impact of the decrease in ecotourism REDUCE REMITTANCES TO THE CML activities on the landscape is hard to quantify at this point. On the one hand, domestic tourism was not A rapid drop in demand for garments, footwear, and greatly impacted until recently, and before the February travel goods led to the cancellation and postponement 20 COVID-19 outbreak and the subsequent lockdown, of orders. By June 2020, 450 factories suspended their some high-end ecotourism destinations managed operations, while 83 had officially closed, leaving only to attract wealthy Cambodians who otherwise would 50% of the factories in operation and 130,000 people have traveled internationally. Nature-based tourism unemployed59. While this sector will rebound, the short- is expected to see growing demand after the crisis. An term loss of remittances from migrant workers, mainly increase in Chinese solo travelers is expected and women, will substantially impact the CML. 57 NWTO, “2020: Worst Year in Tourism History with 1 Billion Fewer International Arrivals,” accessed March 4, 2021, https://www.unwto.org/ news/2020-worst-year-in-tourism-history-with-1-billion-fewer-international-arrivals. 58 Maurice Rawlins, Werner Kornexl, and Sumit Baral, “Enabling Ecotourism Development in Cambodia” (Washington, DC: World Bank, 2020). 59 “Cambodia in Quarantine: Locking the Factory Doors,” Southeast Asia Globe, August 10, 2020, https://southeastasiaglobe.com/cambodia- garments-covid-19/. 29 The impact of COVID-19 led to a significant decrease PRE-EXISTING INDEBTEDNESS in foreign direct investment affecting the construction sector. While most large-scale construction projects The loss of jobs and incomes is particularly concerning, are still ongoing, there is a deep concern that COVID-19 given the high level of indebtedness of the local may have burst a bubble on the high-end construction population. Pre-COVID19 economic development in market and that the upcoming years will show a Cambodia increased the population’s confidence in the sharp reduction in new projects . The impact on the 60 stability of their household incomes and their ability to estimated 200,000 jobs of the sector is likely to be service loans from microfinance institutions (MFI). 2.6 more modest than the impact on the labor-intensive million Cambodian borrowers are holding more than garment, footwear, and travel goods industries. Like US$ 10 billion of microfinance debt (around 40% of the the previous sectors, the construction sector has been GDP). With an average level of MFI debt of US$ 3,804 powered by rural migrant workers whose families rely per borrower, Cambodia has the highest level of MFI on remittances. debt in the world, higher than the annual average wage was in 2017.64 Unpublished reports suggest that 50% of INTERNATIONAL REMITTANCES ARE the MFI borrowers are over-indebted.65 In the CML, the SIGNIFICANT IN THE CML AND HAVE level of household debt can also exceed 100% of annual DROPPED SUBSTANTIALLY BECAUSE OF incomes (Figure 11). A significant share of the loans is COVID-19 used to cover medical expenses and food supplies, rather than for investing in assets.66 The level of remittances to low and middle-income countries is predicted to drop by 20% in 202061. In Much of household debt is collateralized by land titles. 2019, Cambodia received US$1.6 billion in remittances, The high risk of losing collateralized land or homes representing 5.9% of the GDP. Migrants in areas affected due to defaulting on debt leads people to make risky by lockdowns and working in sectors impacted by the decisions,67 including involving themselves in illegal economic crisis will suffer the most. For Cambodia, this activities, such as poaching, logging, charcoaling, and is especially concerning for migrants to Thailand who land clearing.68 CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S account for 93% of migrant workers.62 Around 90,000 In remote areas of the CML, most debt is to Cambodian migrant workers have already returned from intermediaries, crop buyers, relatives, grocery store Thailand, including to provinces in the CML.63 Given the owners, and wealthier households in the village. In importance of international remittances in the CML, these remote areas, because there are few providers, (Figure 9) this downturn will likely have a significant there are also low levels of debt to MFIs. While the impact on livelihoods in the landscape. government has been asking MFIs to provide flexibility in the repayment of the loans, those with informal loans are less likely to benefit from these measures. 60 “Cambodia in Quarantine: Hanging up the Hard Hat,” Southeast Asia Globe, August 12, 2020, https://southeastasiaglobe.com/hanging-up- the-hard-hat/. 61 Migration and Remittances Team - World Bank, “COVID-19 Crisis Through a Migration Lens,” Migration and Development Brief (Washington, DC: World Bank, April 2020). 62 “General Population Census of the Kingdom of Cambodia 2019 - Final Census Results” (Phnom Penh, Cambodia: National Institute of Statistics, Ministry of Planning, October 2020). 63 Driven Out: One Village’s Experience with MFIs and Cross-Border Migration,” Briefing Paper (Phnom Penh, Cambodia: LICADHO, May 2020). 64 Average monthly salary of 1,039,000 Riels in 2017 according to Cambodia Socio-economic Survey, National Institute of Statistics. 65 “Collateral Damage: Land Loss and Abusers in Cambodia’s Microfinance Sector” (Phnom Penh, Cambodia: LICADHO and Sahmakun Teang Tnaut, August 2019). 66 Fauna & Flora International, unpublished data. 67 “Debt and the Migration Experience: Insights from South-East Asia” (Bangkok, Thailand: IOM, 2019). 30 68 Sopheak Chann and Tim Frewer, “Commodity Frontiers - An Ethnographic Study of Social-Environmental Interaction of Upper Stung Prek Thnot River Catchment, Eastern Cardamom Mountains” (Phnom Penh, Cambodia: UNDP, July 2017). Figure 11. Level of debts in rural communes of the CML. Average income/debt per household $700 76% 80% $600 70% $500 60% 50% $400 42% 40% $300 33% Average income 30% $200 20% Average debts $100 10% $0 0% Household debts Po Bong O’Som Tatai Leu Data: Fauna & Flora International, unpublished IMMIGRATION INTO THE CML BECAUSE RGC RESPONSE TO COVID-19 OF COVID-19 JOB LOSSES WILL PUT The RGC implemented several measures to mitigate FURTHER PRESSURE ON NATURAL the impact of COVID-19 on livelihoods. To support the RESOURCES poorest populations, the RGC started providing direct At the national and regional levels, reports of poaching cash transfers in June 2020. As of October 2020, 2.6 million and illegal logging due to immigration and loss of people from 640,000 households have benefited from livelihoods are increasing. Both workers who have the program, with monthly spending of US$30 million.70 returned from domestic and international work and For unemployed workers in the garment, footwear, and migrants forced from more populated provinces can travel goods sectors, the government introduced an increase pressure on natural resources in the CML. Such unemployment benefit of US$70 per month, with US$40 trends have already been observed in other countries paid by the government and US$30 paid by the factories. of the Indo-Pacific region and are putting additional Unemployed (formal) workers in the tourism sector will CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S pressure on natural resources and local food systems.69 also receive an unemployment benefit of 20% of the minimum wage, valued at around US$40 per month. Finally, the RGC implemented various tax relief efforts to support the most affected sectors. These measures have significantly mitigated the impacts of COVID-19, in terms of poverty, and will offset some of the negative impacts on livelihoods detailed above. 69 Todd Sanderson et al., “Food Systems Security, Resilience and Emerging Risks in the Indo-Pacific in the Context of COVID-19: A Rapid Assessment,” ACIAR Technical Reports (Canberra, Australia: Australian Centre for International Agricultural Research (ACIAR), 2020). 70 Sodeth Ly et al., “Cambodia Economic Update : Restrained Recovery - Special Focus Adapting to COVID-19 in an Uncertain World,” Cambodia Economic Update (Washington, DC: World Bank, 2020). 31 3.2. CLIMATE CHANGE IS THE CROP LOSSES AND MASS POPULATION MOST SEVERE THREAT TO DISPLACEMENT IN SOUTHEAST ASIA LIVELIHOODS IN THE CML DUE TO CLIMATE CHANGE Southeast Asia will be particularly affected by climate THE IMPACTS OF CLIMATE CHANGE change with threats to the stability of food systems. WILL BE SEVERE AND WILL IMPACT An increase by 1.5-°C of the global mean temperature, ALREADY MARGINALIZED PEOPLE AND representing locally between a 1.6-2.6°C increase in land temperature, will threaten crop yields in Southeast THE NATURAL RESOURCES ON WHICH Asia. With an increase of 3-4°C of the global mean THEY DEPEND temperature, crop loss in the region may reach 60%. The impacts of climate change are going to be Such disruptions are likely to lead to massive significant in the coming decades. Recent predictions population displacement.72 of an increase in global temperature of 2.6-3.9°C by Compared to 2000, by 2050, days that exceed human 206071 rule out the possibility of a mild change in thermoregulatory capacity will double. This increase in the climate. the number of days in which the combined humidity Natural ecosystems will be under significant pressure. and temperature exceed human thermoregulatory From 1.5°C of warming, the risk of wildfires becomes capacity will result in increasingly lethal heat events, high. From 3°C, there is a high probability of severe thus threatening many human activities in the area.73 and irreversible wildfires. Wildfires and other causes of There is a need for climate-smart models of forest loss are likely to most severely impact already development. Given the projected impacts of climate marginalized populations who rely on forests for their change on the landscape (Figure 12), it is crucial to livelihoods. Similarly, species already threatened by develop models that contribute to climate change habitat loss and poaching will be at most risk from mitigation while also building resilience to the coming climate shocks. At a larger scale, loss of ecosystem CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S climate shocks. Such models should either support services will occur because of the lower productivity of carbon sequestration in the landscape or support forests due to higher temperatures and reduced water the switch to a low-carbon economy in Cambodia. In regulation that occur as a result of a higher frequency addition, they should contribute to the restoration of of extreme weather events. ecosystems and diversity of livelihoods to increase households’ resilience to climate hazards. 71 S. Sherwood et al., “An Assessment of Earth’s Climate Sensitivity Using Multiple Lines of Evidence,” Reviews of Geophysics, July 25, 2020, e2019RG000678, https://doi.org/10.1029/2019RG000678. 72 United Nations’ Intergovernmental Panel on Climate Change’s (IPCC), “Special Report on Climate Change and Land” (IPCC, 2019). 73 Camilo Mora et al., “Global Risk of Deadly Heat,” Nature Climate Change 7, no. 7 (July 2017): 501–6, https://doi.org/10.1038/nclimate3322. 32 Figure 12. Average high daily temperature for Cambodia. Climate change projections under the RCP 8.5 scenario CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 33 CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 34 04 OPPORTUNITIES FOR CONSERVATION-FRIENDLY ECONOMIC DEVELOPMENT This section of the report will focus on Conservation- more fundamental changes are needed to achieve friendly economic activities (CFEA). These models conservation and development impacts,77 partnerships should directly or indirectly contribute to the protection between communities and the private sector can and restoration of biodiversity and ecosystem services, be important tools in a landscape approach to the mitigate and build resilience to climate change, and management of PAs. improve the local communities’ livelihoods. Developing conservation-friendly businesses is CURRENT MODELS FOR RURAL beyond the capacities of many CPAs. Investing in DEVELOPMENT IN CAMBODIA DO CFEA requires access to finance, technical know-how, NOT CONTRIBUTE TO LONG-TERM organizational capacity, and acceptance of a long- SUSTAINABILITY term return on investment. These characteristics are infrequently found among CPAs, which also suffer The scale of challenges posed by climate change and from highly restrictive regulations. Conversely, the loss of ecosystem services requires new development entrepreneurial and innovative Cambodian business models in human-dominated parts of PAs. The various scene, along with the emergence of funds for investing forms of private sector partnerships implemented in in “nature-based solutions” and land restoration Cambodia have contributed to the country’s impressive projects, offer an interesting opportunity to develop economic development in previous decades, but it new development models in human-dominated parts relied, to a considerable extent, on natural resources and of PAs. contributed to high rates of environmental degradation while also increasing inequalities. The Nationally Conservation-friendly economic activities complement Determined Contribution (NDC) commits itself to more direct public support to local communities. CFEA climate-smart agriculture and to a significant increase does not replace the need for technical assistance to in forest cover. Among these “nature-based solutions”, communities to develop community enterprises, nor forest restoration through agroforestry is identified as replace the need for other public services in these the most cost-effective option for storing carbon and areas. The role of MoE is to promote sustainable models CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S gaining some time to achieve the necessary fundamental of economic development, set up rules and procedures changes in society and in the economy.74,75 similar to those of ecotourism projects, and at the same time facilitate coordination between communities and Engaging the private sector is critical to achieving the private sector. real conservation impact. 76 Given the financial gaps and the underlying barriers to developing sustainable The following sections present possible models that business models by local communities, private sector can contribute to achieving these outcomes and some investment will be crucial for more sustainable business of the mechanisms that can enable them. models if PAs are to remain viable. Acknowledging that 74 Jean-Francois Bastin et al., “The Global Tree Restoration Potential,” Science 365, no. 6448 (July 5, 2019): 76–79, https://doi.org/10.1126/ science.aax0848. 75 Jean-François Bastin, “Erratum for the Report: ‘The Global Tree Restoration Potential’ by J.-F. Bastin, Y. Finegold, C. Garcia, D. Mollicone, M. Rezende, D. Routh, C. M. Zohner, T. W. Crowther and for the Technical Response ‘Response to Comments on “The Global Tree Restoration Potential”’ by J.-F. Bastin, Y. Finegold, C. Garcia, N. Gellie, A. Lowe, D. Mollicone, M. Rezende, D. Routh, M. Sacande, B. Sparrow, C. M. Zohner, T. W. Crowther,” Science 368, no. 6494 (May 29, 2020), https://doi.org/10.1126/science.abc8905. 76 Peter Kareiva and Michelle Marvier, “What Is Conservation Science?,” BioScience 62, no. 11 (November 1, 2012): 962–69, https://doi. org/10.1525/bio.2012.62.11.5. 77 Bram Büscher and Robert Fletcher, “Towards Convivial Conservation,” Conservation and Society 17, no. 3 (July 1, 2019): 283–96, https://doi. org/10.4103/cs.cs_19_75. 35 4.1. PLANTATION FORESTRY IS A FAST-GROWING SECTOR IN Examples of high-value timber plantations exist in CAMBODIA Cambodia. Two companies are operating plantations in and around the Phnom Aural Wildlife Sanctuary in Cambodia has the second-highest rate, globally, of the CML: Grandis Timber, the only company certified increased planted forest area. Despite the challenge by the Forest Stewardship Council (FSC) in Cambodia; of encroachment and forest fragmentation of natural and Cambodia Teak, a Public-Private Partnership (PPP) forests, between 2010-2020, planted forest area in collaboration between the MoE and a private company. Cambodia has grown by 14.6% annually, the highest This collaboration is being piloted in Tasal CPA growth rate in the world after Nicaragua.78ZZZ (Figure 13). Plantations on degraded lands are promoted to The Cambodia Teak production model has a relatively address the timber supply gap in the region. They short harvest cycle but high inputs and capital are also important for the creation of rural jobs and requirements. Cambodia Teak aims to have a 7-year contribute to climate mitigation. However, commercial harvest, as opposed to the 15-25-year harvests in tree plantations, even on degraded land, could also conventional plantations. The company is using create negative impacts on ecosystem services79, if not irrigation systems and fertilizer to achieve growth done sustainably. In the context of PAs and biodiversity throughout the year. Such irrigation is possible due to corridors, two types of approaches seem feasible: High- the Tasal CPA being located close to the Stung Tasal value timber species, such as teak, and short-rotation dam, an Indian-funded dam aiming to provide irrigation tree species, such as acacia and eucalyptus. capacity for 10,000 ha in the Aural District. Aside from questions around the sustainability of the production HIGH-VALUE TIMBER PLANTATIONS HAVE model in the context of climate change, the capital- RESTRICTIVE CAPITAL REQUIREMENTS intensive nature of the model is likely difficult to be AND LONG CROP CYCLES widely replicated. Nevertheless, this model has piloted CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S an interesting benefit-sharing mechanism that could Salvage logging in Economic Land Concessions and serve as a model for similar forms of from infrastructure development projects used to private-sector partnerships. represent 90% of the legal timber supply for domestic and export markets.80 The moratorium of new ELCs will The FSC certification of the Grandis Timber production increase the pressure on PAs with no other significant model requires social, economic, and conservation source of timber to meet the growing domestic and outcomes. As part of the FSC requirements, Grandis regional demand. Plantations offer an opportunity to Timber is required to engage with local communities and offset this risk to PAs. contribute to their social and economic development.81 The company supported the mapping and legal recognition of community land around the concession and allowed cattle grazing while improving local road 78 Global Forest Resources Assessment 2020 (FAO, 2020), https://doi.org/10.4060/ca8753en. 79 Carolina Y. Shimamoto et al., “Restoration of Ecosystem Services in Tropical Forests: A Global Meta-Analysis,” PLOS ONE 13, no. 12 (déc 2018): e0208523, https://doi.org/10.1371/journal.pone.0208523. 80 Delux Chhun, “Drivers of Forest Change in the Greater Mekong Subregion: Cambodia Country Report” (USAID Lowering Emissions in Asia’s Forests, September 2015). 81 FSC, “Interim National Standard for The Kingdom of Cambodia - v1.0,” 2020. 36 Figure 13. Intensive teak plantation by private company in Tasal CPA, Phnom Aural Wildlife Sanctuary. Photo: H.E. Khieu Borin, Director of Community Livelihoods Department at the Ministry of Environment infrastructures. FSC also requires the company to The outgrower approach has potential, but it is limited CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S allocate a minimum of 10% of the management unit to by the capital requirements and long crop rotation of conservation, but Grandis Timber has gone beyond this, high-value timber plantations. The capital-intensive with 2,256 ha of conservation area managed in close nature of the model piloted in Tasal CPA will mean it is collaboration with Conservation International, Wildlife unlikely to be adopted by local farmers. The promotion Alliance, and the Forestry Administration. The company of an outgrowers scheme (also referred to as contract has also been providing thinning residues to local farming82) in collaboration with Grandis Timber has charcoal production centers in a nearby Community more potential. But in a frontier landscape like the Forest, contributing to the reduction of illegal sources CML where more immediate returns are expected, for fuelwood. the timeframe for high-value timber rotation (around 20 years for conventional teak) could be perceived as unmanageably long, unless other financial incentives are provided upfront to communities. 82 In this report we use contract farming and outgrowing interchangeably. These terms refer to long-term supply agreements between farmers and agribusiness processing/marketing companies/buyers that bring mutual gains and normally include price and supply arrangements (date, quantity, and quality). Contractual arrangements may be verbal or written and vary widely, depending on the countries, crops and companies concerned. Schemes usually entail a range of activities (services) that secure access to produce – as in-kind input supply or on credit – extension services, transport for produce, and credit guarantees. Lisa Paglietti and Roble Sabrie. Outgrower schemes: advantages of different business models for sustainable crop intensification - Ghana case studies. FAO Investment Centre. Learning from Investment Practices. 2012 37 SHORT-ROTATION PLANTATIONS HAVE Figure 14. Acacia plantation in CamAgra plantation, FASTER RETURNS ON INVESTMENT BUT Kampong Seila, Koh Kong Province. HIGH ENVIRONMENTAL COSTS RELATIVE TO THE INCOME THEY GENERATE The focus in the region is changing towards fast- growing species like acacia and eucalyptus. While historically, most planted forests in the region were for high-value timber production, the demand for sawn wood, plywood, particleboard, pulp and paper, cardboard, and sustainable biomass energy is increasing rapidly. The demand for wood fiber is also steadily increasing in the quest for replacing plastic fibers. More efficient wood processing technologies enable Photo: Yann François the processing of lower-diameter logs for furniture or structural wood elements.83 For example, the demand for paper and paperboard in the Asia-Pacific has risen high-quality planting material. This model benefits from 102 million tonnes (t) in 2000 to 196 million t in companies with reduced operational costs and risks 2017, fueled by e-commerce development. The market related to land tenure while providing significant is likely to continue growing following the growth of income for landholders in degraded areas. Lao PDR has e-commerce, the global trend to move away from also attracted a number of large-scale investors for the plastic, and the development of biomass pellets as a production of pulp for the textile industry. Companies source of renewable energy. have expressed interest in approaching Cambodia if regulatory conditions are favorable. A few large-scale companies are dominating the short- rotation timber sector, and smallholder plantations There is good potential to include planted forests in CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S are not common. This is a result of industrial-scale highly degraded parts of CPAs to contribute to local plantations of several thousand hectares of acacia and income generation and PA financing. Such an initiative eucalyptus, commonly developed as part of the ELC should promote outgrowers schemes, building on the mechanism (Figure 14). Following the moratorium on lessons learned from successful policies in Vietnam ELC, the use of state land for large plantations continued and Thailand. Such short-rotation plantations will be in the form of PPPs between the private sector and the more attractive to CPA members than high-value timber Forestry Administration.84 plantations are, given their ability to generate revenues in a shorter timeframe and reduce performance risk. Vietnam and Thailand have developed strong policies The primary constraint on this approach is that in order to support tree planting by smallholders in areas to be profitable, companies require a network of CPA where agriculture is uneconomic. It is estimated plots of at least 200 ha per CPA. Finding such places that 70% of Thailand’s eucalyptus supply is produced in the CML will require more detailed mapping of the through contractual arrangements between companies CPA degradation status than that which is currently and farmers. In most cases, companies provide financial available. and technical support to farmers, including access to 83 Food and Agriculture Organization of the United Nations, Forest Futures Sustainable Pathways for Forests, Landscapes and People in the Asia-Pacific Region, 2019. 84 Under the sub-decree on Rules for Granting User Rights to Plant Trees within State Forest Lands, the Forestry Administration is allowed to engage in Public Private Partnership for tree plantation on public lands. 38 Short-rotation plantations tend to have higher 4.2. INTERCROPPING biodiversity impacts than other forms of forest INCREASES OPPORTUNITIES management for a given economic return. A meta- analysis of 287 published studies of biodiversity- FOR LOCAL COMMUNITIES economic tradeoffs between various forest management approaches found that fuelwood plantations resulted Short-rotation tree plantation with intercropping of in the greatest impact on the richness of local species. agricultural crops has the potential to significantly Furthermore, the fraction of species lost per US$1 million increase benefits for the local population. Increased in profits for Acacia biomass plantations was three benefits from this approach are derived from allowing times that of plantations for teak logs and ten times farmers to grow crops and raise cattle within the greater than that of conventional selective logging of plantation, thus increasing the overall economic various species85. potential of the model. Monocultures are particularly vulnerable to climate Large-scale commercial approaches to agroforestry change due to the inherent lack of resilience to pests, are being implemented in the region. The agroforestry diseases, and climate hazards. Plantation monocultures models implemented in Lao PDR provide an interesting are more at risk for catastrophic losses from species- case study of multiple-use plantations (Figure 15).87 specific pests and diseases and severe weather events Several variations of the model exist, but the most compared to mixed-species plantations. To increase common one is a 9m by 1m spacing of eucalyptus trees, climate resilience and reduce risks from pests and instead of the conventional 3m by 3m spacing. This diseases, developing mixed-species plantations or a extra spacing allows farmers to grow rice, then shade- fine-scale mosaic with a variety of single-species stands tolerant crops, and finally, grass for livestock grazing as is recommended.86 the canopy cover grows. The development of this model has led to new collaborations between the private The objective of private sector partnerships in PAs sector and communities to promote silvo-pastoral should be to ensure that any loss of biodiversity brings systems, bringing benefits to both the company (lower CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S the maximum economic return to the widest variety weeding costs) and the farmer. In Cambodia, most of people. Different strategies can be implemented to plantation companies choose acacia over eucalyptus, achieve this objective, from maximizing land-use through as acacia produces more shade than eucalyptus does intercropping with agricultural crops, to displacing and has a more positive impact on soil fertility. Given forest degradation by using forest residues for charcoal this, it would be very worthwhile to pilot this model production, to maintaining some conservation areas in collaboration with the private sector to assess its among concessions. applicability for CPAs. 85 Abhishek Chaudhary et al., “Impact of Forest Management on Species Richness: Global Meta-Analysis and Economic Trade-Offs,” Scientific Reports 6, no. 1 (April 4, 2016): 1–10, https://doi.org/10.1038/srep23954. 86 Michael Padmanaba and R. Corlett, “Minimizing Risks of Invasive Alien Plant Species in Tropical Production Forest Management,” Forests 5 (August 15, 2014): 1982–98, https://doi.org/10.3390/f5081982. 87 Implemented by the Swedish companies Burapha Agroforestry Company (BAFCO) and Stora Enso Laos Stora Enso has since decided to downsize its operations in Laos: https://www.storaenso.com/en/sustainability/latest- 39 Figure 15. The intercropping cycle (inert) and examples of intercropping rice (top) and cassava (bottom). Year 1 Plantation of trees and crops Year 7 Year 1 Tree harvesting Plantation of shade tolerant crops Year 3 to Year 7 Year 3 to Year 4 Cattle grazing Thinning operations Cycle adapted from Burapha Agroforestry and images from New Generation Plantation/Stora Enso Agroforestry, Lao PDR. Agroforestry outperformed plantation monocultures Vacant, degraded, marginal, or under-utilized land among model approaches trialed in Laos. Analysis in CPAs is required for tree plantations. Such areas CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S shows that the agroforestry model described above are required to attract investment in plantations or outperforms monocultures for both the company agroforestry that would create employment in the area and local farmers, with a higher net present value and contribute to displacing pressure from and internal rate of return than that of eucalyptus natural forests. monoculture88 (Figure 16). The development of private sector partnerships for The main barrier to the expansion of intercropping establishing medium-scale plantations will be limited is the market’s security for the second crop and the by companies wanting to develop plantations close need for technical assistance. A survey of stakeholders to their existing concessions. Phnom Aural Wildlife involved in the perennial crop sector in the region Sanctuary appears to be the most interesting location highlighted these barriers. Beyond technical support, 89 in the CML due to its proximity to two leading plantation partnerships with private companies are needed to companies: the Grandis Timber and CamAgra, with the secure and develop the market of the second crop. latter already having an ongoing collaboration with the MoE. 88 Somvang Phimmavong et al., “Financial Returns from Collaborative Investment Models of Eucalyptus Agroforestry Plantations in Lao PDR,” Land Use Policy 87 (September 1, 2019): 104060, https://doi.org/10.1016/j.landusepol.2019.104060. 89 Challenges and Opportunities for Intercropping in Southeast Asia - Summary of EIU Findings” (USAID Green Invest Asia, August 2020). 40 Figure 16. Economic performance of short-rotation tree plantation with intercropping in Laos PDR. 900 25% 800 20% NPV in US$ (12% discount rate) 700 600 15% 500 IRR 400 10% 300 200 5% 100 0 0% Eucalyptus monoculture Eucalyptus with cassava Eucalyptus with rice NPV (12% discount rate) IRR Data: Phimmavong et al., 2019. 4.3. SWITCH TO SUSTAINABLE has been the historical supply area for charcoal for CHARCOAL USING Phnom Penh, with more than 130,000 t produced every year,91 representing a third of the national production PLANTATION RESIDUES (Figure 18). While in other parts of the country, charcoal is mostly a by-product of land-use change, in the Aural Most plantation models generate residues that can Wildlife Sanctuary, as well as in other parts of the CML, be used as biomass energy. Residues in plantations it remains a driver of forest degradation. originate from thinning, harvesting, and processing. CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S More than half of the biomass produced can be used More than 80,000 farmers are estimated to be for energy production for plantations aiming to involved in producing charcoal.92 This figure is likely produce veneers. an underestimate, as it excludes all the producers who are not engaged in agricultural production. Research Despite substantial growth in clean energy access in conducted by Kampong Speu Province in the northwest urban areas, the charcoal sector remains an important of the CML showed that firewood and charcoal revenues driver of forest degradation in Cambodia. More than exceeded the combined revenues from timber and NTFP 400,000 t of charcoal is consumed every year in the collection.93 domestic market, representing more than 3 million t of wood harvested per year90. The Aural Wildlife Sanctuary 90 Dr. Moeko Saito Jensen and Dr. Richard Colin Marshall, “Human Development Report 2019: Sustaining Natural Resources for All” (Phnom Penh, Cambodia: UNDP, 2019). 91 Yann François, Vannareth Huoy, and Romain Joya, “Charcoal, Forests and Livelihoods in the Northern Cardamoms, Cambodia” (Phnom Penh, Cambodia: Geres, February 2015). 92 National Institute of Statistics and Ministry of Agriculture, Forestry and Fisheries, “Agricultural Census 2013” (Phnom Penh, Cambodia: Ministry of Planning, December 2015). 93 “Valuation of Ecosystem Services in the Prek Tnoat Watershed (2nd Draft)” (UNDP: Phnom Penh, 2018). 41 Figure 17. Acacia Mangium thinning residues from Grandis Timber in Kampong Speu could be used for charcoal. Photo: Eugene Kraamwinkel Despite the scale of the charcoal sector, it remains scale industrial technologies can double conversion informal with few private initiatives. These few efficiency while reducing the processing time from 2 private sector initiatives include Grandis Timber, which weeks to 2 days. has piloted an approach with a nearby Community Forest using thinning residues from its plantation for The development of plantations is likely to be viable CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S sustainable charcoal (Figure 17). Khmer Green Charcoal in a wide range of areas, but co-benefits may vary has expanded its current char-briquette business to from place to place. The development of a plantation include sustainable charcoal sourced from Community model in which residues are sold to charcoal producers Forestry and commercial plantations residues. would have the highest co-benefits for PA management in locations such as Phnom Aural, where there have Establishing plantations in degraded CPAs and historically been high incidences of illegal harvesting of encouraging charcoal producers to transition to timber and charcoal. sustainable production using residues has great potential. This approach would be particularly Many CPAs are in heavily degraded areas and could appropriate in the Phnom Aural Wildlife Sanctuary, a represent interesting locations for commercial major center for charcoal production leading to direct tree plantations. One confounding factor for such forest degradation of the PA. For this approach to be developments is the high rates of land cover change successful, an increase in law enforcement for a currently happening in many CPAs (Figure 19). Therefore, field unregulated sector with very low levels of formal or assessments and consultations with local stakeholders informal taxation is necessary. With the formalization are essential to identify real potential, maximize co- of the sector, investments in high-efficiency charcoal benefits, and ensure that the plantations do not technologies can lead to major wood savings. Large- negatively impact vulnerable populations. 42 Figure 18. Flow of charcoal and location of producers in Phnom Aural Wildlife Sanctuary. 4.4. AGARWOOD IS A HIGH- The high demand for agarwood led to the depletion of wild resources and has caused it to be classified as VALUE PRODUCT WITH A Critically Endangered95. Agarwood is among the most STRONG CAMBODIA BRAND expensive incense in the world, costing up to US$30,000 per kg for its essential oil. It has been overharvested in Agarwood is a highly-priced incense that has been Cambodia and throughout its range. This scarcity has widely used in the Middle East, China, and Japan for resulted in a ban on the trade of agarwood harvested CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S more than 3000 years. Agarwood has been a signature 94 in the wild. Convention of International Trade of product of Cambodia for centuries, with Southeast Asia Endangered Species (CITES)96 permits are required being the historical center of supply. It is a fragrant, for the trade of cultivated agarwood.97 The increase resinous wood used in incense, perfume, and small in demand, decrease in supply, and high prices are carvings. Agarwood forms through the wounding of increasingly attracting investors, mainly from China, Aquilaria trees. The wound can originate from lightning who see agarwood as a high-value asset98 and fund strikes, broken branches, animal grazing, pests and large-scale plantations. diseases, and the infection of the heartwood with a specific mold (Phialophora parasitica). 94 Arlene López-Sampson and Tony Page, “History of Use and Trade of Agarwood,” Economic Botany 72, no. 1 (March 1, 2018): 107–29, https:// doi.org/10.1007/s12231-018-9408-4. 95 Cheng Seng Tan et al., “Agarwood Induction: Current Developments and Future Perspectives,” Frontiers in Plant Science 10 (February 7, 2019), https://doi.org/10.3389/fpls.2019.00122. 96 Convention on International Trade in Endangered Species of Wild Fauna and Flora. https://cites.org/en 97 under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) 98 Al Jazeera, Scent from Heaven - On the Trail of Oud, accessed July 8, 2020, https://interactive.aljazeera.com/aje/2016/oud-agarwood-scent- from-heaven/index.html. 43 Figure 19. An example of the land cover change in CPAs that is widespread in the landscape. Cheng Leng CPA, Phnom Aural Wildlife Sanctuary. 2017 2018 2019 Photo: Eugene Kraamwinkel Cambodian agarwood is considered high quality and the place of origin is now more a brand name than is highly sought after. The perception of the quality of the actual country of origin, and provenance is hard CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S Cambodian agarwood originated in the mid-1990s when to establish.99 Because Cambodian agarwood remains Cambodia was a major supplier of agarwood, mostly highly in demand, leading Thai and Vietnamese sourced from the CML. Although largely extirpated from sellers are apparently marketing their products as the wild, agarwood still occurs in the CML in smallholder Cambodian Agarwood. plots from 20 to 20,000 aquilaria trees, mostly in Chi Phat and Tatai Leu in the Koh Kong Province. Large- The total value of the agarwood market is unknown scale plantations have been developed in recent times. but is likely around US$6-8 billion annually. Cambodia Different processes using mechanical components, reported only 23 kg of agarwood exports between 2013- chemicals, insects, or pathogens have been developed 2017, indicating that most trade from the country is to mimic the formation of agarwood. It is estimated undeclared.100 This is supported by reports of agarwood that agarwood can be produced after 6-7 years in oil being transported in personal luggage, by plane, to Koh Kong Province. Although the country of origin is Singapore before being sold on the black market to important in the price and desirability of agarwood, buyers from the Middle East.101 99 Marina Antonopoulou et al., “The Trade and Use of Agarwood in the United Arab Emirates” (Cambridge, UK: TRAFFIC, October 2010). 100 “CITES Trade Database,” accessed July 8, 2020, https://trade.cites.org/. 101 Marina Antonopoulou et al., “The Trade and Use of Agarwood in the United Arab Emirates” (Cambridge, UK: TRAFFIC, October 2010). 44 Box 4. Producing Agarwood by inoculating trees A partnership between Conservation International, private-sector partner Krassna Cambodi, and communities in Tatai Leu piloted Agarwood inoculation on private home- gardens in the Central Cardamoms National Park. Aquilaria trees are inoculated using a process patented by the University of Minnesota. This method of producing Agarwood involves forming an artificial wound – by drilling a hole – in the xylem of a 4–5-year-old tree with a pipe then placed in the wound to aerate it. A resin-inducing agent such as a fungus is introduced into the wound that stimulates resin production in the tree. Cultures of fungi are isolated from fresh agarwood obtained from natural forests are then also introduced into the wound. The pilot projected ended with positive technical results — buyers were pleased with the quality of the Agarwood — but there is insufficient financial incentive for the farmers to develop this further; the current buying price per tree remains relatively low with a maximum of US$50 per tree after 10 years. The process of inoculating Aquilaria trees to produce Agarwood (left) and the CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S resultant infected heartwood (right) from a project in the Central Cardamoms A next step being considered is for farmers to form an National Park. association and develop an outgrower relationship with Photo: Krassna Cambodi one of the large Agarwood plantations in the Koh Kong Province. For this to be viable, a revenue-share on oil sales for the farmers would be needed to increase their returns. 45 Figure 20. Potential agarwood plantation areas based on elevation (blue) Several local companies are engaged in the agarwood permits appears to be essential for developing sector but have limited processing, technologies, the sector. and ability to engage with international buyers. One such pilot project, a partnership between communities Agarwood fits well into the premium products strategy. in Tatai Leu, Conservation International, and private Given agarwood from Cambodia is considered a premium sector partner Krassna Cambodi, is inoculating aquilaria product appreciated by buyers, there is potential to trees using a patented process.102 Although at the pilot develop the sector in a certified and sustainable way. stage the quality of the agarwood has been promising, Working with existing actors in the value chain to CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S financial returns have not been as promising (Box 4). develop the sector in a sustainable way represents an interesting opportunity for the CML. In the short and Most agarwood is sold without a CITES license due medium terms, these activities will likely need to be to the administrative costs of obtaining the licenses. subsidized to support the engagement of smallholder While such a license would provide a premium for farmers developing their holdings. sellers and guarantee the agarwood’s legality, many actors in the supply chain do not believe that the Agarwood production could be integrated with other administrative burden of obtaining a permit is worth added-value crops in a forest farming model. Such the effort. Fulfilling the need for CITES permits requires a model could build on the existing essential oil engagement with three different ministries. The Forestry production unit in Tatai Leu (Box 12). This would be a Administration regulates the trade, but agreements long-term project that goes beyond what most farmers from the MoE and Ministry of Commerce are required to expect in terms of time for a return on investment, and remove the agarwood from the PA and export it legally. it requires a significant long-term commitment from Being able to streamline the process of obtaining CITES private and public stakeholders. 102 Robert Blanchette and Henry Beek, Cultivated Agarwood, United States US20050008657A1, filed August 5, 2004, and issued January 13, 2005, https://patents.google.com/patent/US20050008657A1/en. 46 Agarwood can grow across a large area in the CML. riendly practices, including refraining from hunting and Although the altitudinal range of agarwood is well illegal land clearing in PAs (Box 5). Farmers are only suited to the CML (Figure 20), this activity would likely permitted to clear agreed areas identified in a land-use be concentrated in Ou Saom and Tatai Leu in the Koh plan within the Community Zone. The Ibis Rice model Kong Province, where there is an existing industry. CPAs can only operate in an area where there is already a have yet to be established at these sites. PA monitoring system in place. The process used is complex and involves a wide range of actors, including 4.5. AGROFORESTRY AND local committees, local law enforcement, NGOs, and CONSERVATION-FRIENDLY the Ibis Rice Conservation Company (Figure 21). Each of AGRICULTURE these actors has its own responsibility in ensuring that the conservation monitoring system is working. Contract farming is a major tool used to achieve economic development and poverty reduction in the The Ibis Rice model is expensive and requires agricultural sector. Various models of contract farming substantial support that cannot be covered by the have been widely applied in the rice sector. In general, private sector alone. Models like Ibis Rice remain these models involve long-term supply agreements reliant on public funding, which indirectly covers the between farmers and the private sector for mutual value of these positive externalities. gains, including premium prices, extension services or credit guarantees for the farmer and for the company, Currently, aromatic rice is mostly produced outside and a guaranteed supply of commodities that may PAs in the CML in the Pursat, Kampong Speu, and have added value for marketing or premium sales.103 Battambang Provinces, so the potential of applying the Examples of such models exist in Cambodia in the rice Ibis Rice model in the landscape will need sector, such as Ibis Rice and Amru Rice, the tobacco further assessments. sector, and at a smaller scale, the agricultural sector for The multi-stakeholder collaboration used in the Ibis fruits and vegetables. Rice model could be applied to other crops. The Ibis Rice model uses an interesting leverage effect for CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S CONSERVATION-FRIENDLY RICE achieving sustainable landscape management in PAs PRODUCTION HAS BENEFITED by mobilizing private sector financial resources and FARMERS AND WILDLIFE increasing local income generation for smallholder The Ibis Rice Conservation Company partners with farmers. In the absence of an NGO partner to subsidize farmers and PA authorities to produce and market high- the costs, this model might be best applied to the export quality, certified-organic jasmine rice. In exchange for of permanent crops to international markets, which is a a premium price, the farmer commits to conservation-f main driver of deforestation in many PAs. 103 Lisa Paglietti and Roble Sabrie. Outgrower schemes: advantages of different business models for sustainable crop intensification - Ghana case studies. FAO Investment Centre. Learning from Investment Practices. 2012 47 Box 5. Wildlife FriendlyTM organic rice that has conservation and livelihood benefits Ibis Rice is a conservation-enterprise developed by NGOs — the Wildlife Conservation Society and Sansom Mlup Prey Cambodia — now run by the stand-alone Ibis Rice Conservation Company. The project aims at partnering with farmers and supporting them in the production of high-quality, organic jasmine rice. The farmers’ production would be then purchased by Ibis Rice at a higher price than current production, under the condition that farmers commit to conservation-friendly practices, including no-hunting and no-land clearing in PA. Ibis Rice is certified Wildlife FriendlyTM and organic in the US (USDA) and EU (EU Organic Regulation) markets as well as EcoCert certified in other countries. Around 80% of Ibis Rice incomes come from exports, mostly to Germany, Canada, and the USA. The high quality is achieved through careful selection of high purity foundation seeds and regular monitoring of farmers to replenish seed stocks ensuring they have enough seeds for the season. This regular monitoring allows Ibis Rice to ensure a good consistency in the production from the foundation seeds to the post-harvest management. The Ibis Rice model can operate successfully with PAs. The success of this model, particularly in ensuring there is no illegal land grabbing or land-use change, requires secure land tenure (with all fields mapped), completed PA zonation, and a close relationship with PA authorities to ensure compliance to PA rules. The model explicitly acknowledges that households and villages grow and require more land, but farmers can only clear agreed areas identified in a land-use plan within the Sustainable Use Zone. The Compliance to Wildlife FriendlyTM and organic rules is the responsibility of local committees, NGO partners, and the Ibis Rice Conservation Company. Wildlife FriendlyTM certification does not create a market or bring a significant price premium. The sales of Ibis Rice to premium markets rely on high quality, consistency, and organic certification. Therefore, while the Ibis Rice model can be seen as a Payment for Ecosystem Services model, it is closer to a hybrid model where buyers and producers are buying for the quality of the rice CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S rather than the environmental service, but the condition of farmers’ premium payments is based on environmental services. Ibis Rice can be seen as a way to, on the one hand, improve farmers’ income and raise their production quality and, on the other hand, provide additional incentives for the respect of the PA management plan and regulations, as these benefits are conditional to the compliance with these regulations. 48 Figure 21 . Ibis Rice compliance monitoring system. Re-designed from Travers (2018) List of households reported for clearance Incidental Rangers and Ibis Rice clearance Patrol teams team reports Organic field plots location Check on Process data from Participatory clearance reports land-use planning Land Use and provide location GIS teams with updated Compliance Planning teams of fields Unit status Unit Annual clearance reports detected through remote sensing Compliance report GIS layers fields (approved, unapproved and to be given up) ORGANIC AND GOOD AGRICULTURAL A wide range of actors is involved in vegetable PRACTICES (GAP) VEGETABLES ARE IN cultivation. These include large-scale, professionally HIGH DEMAND managed farms, farmers’ cooperatives, businesses CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S engaged in contract farming, and individual There has been a rapid growth in demand for high- smallholders. quality and safely produced vegetables in Cambodia. This growth has been driven by a growing middle- The vegetable market is increasingly split into the class and increasingly health-conscious consumers in premium and local market segments. The premium Cambodia, a growing tourism sector and government, and segment is for GAP, and organic vegetables have higher- consumers’ willingness to reduce imports of vegetables priced products targeted at supermarkets, hotels, and from Vietnam, Thailand, and China. Despite the increase restaurants in major urban centers and tourist areas. in domestic production, imports still represented 32% The local wet market segment generally offers lower of the vegetable consumption in Cambodia at the end prices and suffers from significant fluctuations in prices of 2019.104 CamGAP is a major initiative to improve food due to its vulnerability to large-scale exports by safety and increase the competitiveness of Cambodian foreign countries. farmers (Box 6). 104 “Boosting Domestic Vegetable Production to Curb Imports,” Khmer Times, January 2, 2020, https://www.khmertimeskh.com/676080/ boosting-domestic-vegetable-production-to-curb-imports/. 49 Box 6. Cambodian Good Agricultural Practices (CamGAP) Food safety standards in Cambodia have not always been considered mandatory. Recently, stakeholders in the agriculture sector in Cambodia recognized that in order to compete with other countries in marketing agricultural products and to improve food safety, GAP need to be better incorporated into all farming activities. CamGAP was developed to increase demand for reliable, high-quality inputs, increase the value of farms, and to develop the skills of farmers. CamGAP has national certification and accreditation systems and draws upon concepts in the ASEAN GAP that itself was based on international A CamGAP certified market garden in Cambodia Photo: Project Alba regulatory frameworks. (Development of standards & scheme for GAP implementation & certification based on ASEAN GAP. FAO 2019) Most businesses see the premium vegetable market Gathering farmers into cooperatives is seen as as the only way to reach profitability. This view was essential to support them in accessing premium expressed by businesses interviewed for this report in markets. Companies supplying major supermarkets both the contract farming and managed farming models. and restaurants require a robust supply chain to ensure The premium market has strict requirements for the orders are on time and of sufficient quality and quantity CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S reliability of the supply, quality, and safety of products, if they are to retain such customers. Cooperatives offer focusing on parasite control for fresh vegetables. In an opportunity not only to secure a sufficient supply of return, the premium market provides high profits. There produce, but also to build the professional capacities is an increasing number of companies focusing on the of farmers. premium vegetable market, including in the CML, where increasing investments in ecotourism also open up The COVID-19 crisis may result in a consolidation of high-end local market demand for vegetables. the sector. Many actors in the horticultural sector have faced severe economic stress due to a drop in demand Working with smallholders in the premium vegetable from the hotels and restaurants linked to tourism. The market involves high logistic costs. Many smallholders development of online grocery platforms has created a only have a few hundred linear meters of vegetables, small, but growing, niche market for some actors, partly and their level of professionalism is generally low. Few compensating for other decreases in sales. farmers see farming as a business that they are willing to invest in, which leads to high costs for the businesses involved to ensure that premium requirements are being met by partner farmers. 50 Despite the challenges, there is great potential It is possible to develop agroforestry models that to develop contract farming for high-quality GAP maintain biodiversity while contributing to economic or organic vegetables to supply ecotourism sites. development. While plantations of fruit trees contain Wholesalers, retailers and restaurants, and hotels significantly less biodiversity than natural forests, report difficulties in locally sourcing high-quality, safe maintaining native species in plantations and/or vegetables. This provides an opportunity for the CSLEP combining different fruit trees and timber species project to strengthen this value chain with technical can have significant positive effects on biodiversity. A assistance and infrastructure, such as greenhouses and global meta-analysis has shown that the promotion of cold storage. Potential partners exist in the CML (Box 7) agroforestry using native species can have an impact that would be suitable as private sector partners. similar to that of restoration activities. However, such activities will undeniably lead to some opportunity AGROFORESTRY WITH PERMANENT costs for farmers that need to be covered, at least in CROPS CAN OFFSET BIODIVERSITY the beginning. It is crucial to explore potential incentive LOSSES FROM PLANTATIONS mechanisms for farmers to maintain some biodiversity in these plantations through some form of payment for Permanent crops are an increasing source of income ecosystem services (PES). for farmers but also a potential driver of land-use change in PAs. Plantations of permanent crops such For export-oriented products, certification and as durian, banana, mango, and mangosteen crops are Payment for Ecosystem Services schemes can provide rapidly expanding in many parts of the CML. These the necessary price premium and incentives to plantations result in land-use change and biodiversity encourage the adoption of more sustainable practices. loss in PAs, but they also provide an increasing source For example, Rainforest Alliance certifies mango, banana, of revenue for the farmers and a source of daily wages citrus, and pineapple under strict no-deforestation for landless laborers. requirements. Farms are required to keep all remanent trees and ensure that the quality and quantity of native It is difficult to develop conservation-friendly trees are stable. A minimum of 10% of native tree canopy CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S livelihoods when competing against highly profitable cover (15% for shade-tolerant species) is required. The permanent crops. Given the profitability of these crops standard also requires owners and workers to refrain and the ability to generate revenues quickly and regularly, from hunting, except for small farmers who are allowed they are very appealing to rural farmers. With high rates to hunt non-threatened species non-commercially. Also, of migration and the establishment of large-scale farms farm owners are required to provide fair profit sharing by external investors, the pressure from perennial crops as well as good working conditions.105 To provide the is likely to continue to increase. Therefore, it is crucial necessary incentives, different types of certification to develop alternative agroforestry models that provide schemes can be combined to provide farmers with good income generation and biodiversity benefits. the necessary payment for Ecosystem Services. These certification schemes include Forest Stewardship Council (FSC), EcoCert Organic certification, Wildlife Friendly certification, and carbon finance, such as Gold Standard or Verified Carbon Standard (VCS). 105 Rainforest Alliance, “Rainforest Alliance Sustainable Agriculture Standard,” June 2020. 51 Box 7. Companies helping develop a reliable domestic market for vegetables. Eco-Agri Co., Ltd. (EAC) and its sister companies Picnic and Khmer Organic have implemented several projects in the CML. EAC has an eco-resort called Picnic in the Kampong Seila District. EAC has been working with a large number of development partners on projects providing technical training as well as high-quality inputs to farmers and, in some cases, supporting market linkages. Innovative Agro Technology (IAT) manufactures greenhouses and supplies agricultural inputs and training. It collaborates with the MoE in the CML on teak plantations and in training farmers on high-quality crops. The greenhouses it manufactures are seen as crucial for developing domestic vegetables and reducing the reliance of imports from Vietnam and China. Greenhouses allow for a steady production all year long, and therefore, allow for engagement in long-term sales agreements with premium buyers. IAT has been working with MAFF in setting-up 120 greenhouses across Cambodia, including in Kampong Speu, Kampong Chhnang, Pursat, and High-quality vegetable production in greenhouses Photo: Innovative Agro Technology Battambang provinces. Project Alba is a social enterprise, created in 2011 in Cambodia, working towards establishing an inclusive and ecological food supply chain. Its approach follows 3 principles: producing high- quality vegetables by operating its own farms in innovative ways, producing inputs and tools that facilitate farmers’ work, coaching farmers, and including them in the supply chains through contract farming schemes. CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S Azaylla is an agribusiness company that was established to create a sustainable, socially responsible agribusiness supply chain that benefits farmers, communities, and partners. It has been working to supply several major restaurants and large retailers with a wide range of fruits and vegetables. Azaylla worked with IAT to engage with farmers using greenhouses to produce GAP vegetables. 52 Certification will be limited to the best producers the Ibis Rice model (Box 5) to other crops and already meeting quality requirements for the premium commodities should be examined. Other mechanisms markets. For other farmers, different sets of incentives include tax credits for maintaining native tree cover, will be necessary. For smallholder farmers who can join grants, and direct PES, under the condition of preserving the certification process through contract farming with native tree cover. Applying such models to agroforestry companies or cooperatives, the benefits can go beyond at scale will be a long-term, multi-stakeholder endeavor. the price premium. 106 Through the certification process, However, challenges aside, such approaches are some smallholder farmers can get opportunities to improve of the most promising models for helping achieve their skills, develop networks, and better understand conservation-friendly economic development and markets. An increasing number of farms target export building climate change resilience across the landscape. markets for crops like mango, banana, and durian. Encouraging these farms to engage in contract farming The potential of agroforestry application with with sustainability certification could positively impact permanent crops is widespread in almost all parts the ecosystems while strengthening the long-term of the CML. That said, some crops are concentrated in development of the sector. specific areas. That is the case not only for the famous Pursat oranges, but also for several other crops, such as Selection of appropriate lands for perennial crops and mangosteen and durian, that are widely planted in the fruit trees. Cashew trees and other community-owned Central Cardamoms. plantations have expanded into conservation and core zones of PAs, with potentially immense impacts Agroforestry production models can support additional on environmental services (e.g. PA Kulen). It will be activities that could significantly increase the job important to identify appropriate degraded lands in creation potential. The development of fruit processing development zones for these activities and to reflect downstream, such as juice products, can add significant those land allocations in the CPA management plans. value and create high-quality jobs, while contributing to the absorption of the seasonal production peak Incentivizing the retention of native cover is likely during harvesting season. Monofloral honey beekeeping CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S to work better than the regulatory ban of forest using native bees can have great potential. Beekeeping conversion, even if the two are not mutually exclusive. combined with crops such as Longan and Lychee, which Several mechanisms to address how plantations of are widely available in the CML, produces high-quality permanent crops are drivers of deforestation should be honey and can improve fruit production by up to 60%.107 explored. For smaller actors, the potential of expanding 106 Ximena Rueda and Eric F. Lambin, “Responding to Globalization: Impacts of Certification on Colombian Small-Scale Coffee Growers,” Ecology and Society 18, no. 3 (2013), https://www.jstor.org/stable/26269351. 107 “Longan Fruit Farmers’ Demand for Policies Aimed at Conserving Native Pollinating Bees in Northern Thailand - ScienceDirect,” accessed June 18, 2021, https://www.sciencedirect.com/science/article/abs/pii/S2212041615300371. 53 4.6. LIVESTOCK AND CHICKEN Box 8. Can wildlife farming benefit FARMING HAVE POTENTIAL conservation? AS CONSERVATION-FRIENDLY For most species that are illegally traded, wildlife farming ACTIVITIES has the potential to exacerbate problems rather than solve them. Wildlife farming can benefit species conservation only if the following criteria are met: PREMIUM LIVESTOCK COULD BE CONSERVATION-FRIENDLY Legal products a satisfactory substitute USING SILVO-PASTORALISM108 • Consumers show no preference for wild-caught animals Livestock raising is an important component of • Quality and taste are considered equal to wild animal livelihoods and security for households, but it does products have some adverse environmental impacts. Promoting • Consumer behavior is not driven by status related to rare and wild animals livestock is a classic livelihood development strategy in many programs and interventions that has improved Demand is met and does not increase the well-being of many communities. However, livestock • Wildlife farming can cover a substantial part of the represents a major contributor to climate change109 demand and can be a significant driver of forest degradation • Demand will not increase due to the legalized market and land-use change110, although smallholders are • Consumer demand will not shift to different species responsible for only 31% of global emissions due to Legal products will be more cost-efficient both agriculture and land-use change for agriculture.111 • Wildlife farming is cost-efficient enough to combat the In addition to increased emissions, increased land- black market prices use change for livestock has resulted in biodiversity • The biology of the species allows for cheap housing in loss. These pressures have been increasing due to the artificial environments large-scale conversion of degraded grazing areas into • Species’ reproduction rates are high enough to allow plantations, ultimately displacing the pressure onto CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S for high outputs • Farmed products can outcompete the illegal market remaining forests. No re-stocking from the wild For livestock interventions to be conservation- • Next generations are bred in captivity only friendly, interventions should focus on integration • Captive animals are not replaced with wild individuals into the landscape by promoting silvo-pastoralism. By integrating trees, forage, and the grazing of livestock in Laundering is absent • Laundering of illegal products is absent mutually beneficial ways, the economic improvements • False licenses and permits are avoided from livestock do not necessarily have to come at the • Other species cannot be disguised as captive-bred species • Captive-bred products can be distinguished from wild 108 The practice of integrating trees, forage, and the grazing of products domesticated animals in a mutually beneficial way. 109 United Nations’ Intergovernmental Panel on Climate Change’s (IPCC), “Special Report on Climate Change and Land” (IPCC, 2019). 110 Food and Agriculture Organization of the United Nations, (Adapted from: Laura Tensen, Under what circumstances can wildlife farming Forest Futures Sustainable Pathways for Forests, Landscapes and benefit species conservation?, Global Ecology & Conservation, Volume 6, 2016, People in the Asia-Pacific Region, 2019. Pages 286-298.) 111 A rough estimate of the proportion of global emissions from agriculture due to smallholders. Sonja Vermeulen, Eva Wollenberg. CGIAR and CCAFS. 2017. 54 Box 9. Chicken farming to reduce hunting and improve livelihoods In the Central Cardamoms NP, Conservation NGO Fauna & Flora International (FFI) has promoted chicken farming for conservation- friendly economic development. The approach developed by FFI focuses on supporting the different components of the market necessary for the long-term development of chicken production in remote areas. All stakeholders are engaged, from veterinarians providing vaccines and treatments, suppliers providing feed, hatcheries providing chicks, MFIs providing the initial capital, to traders and consumers buying the chickens. FFI trains and coaches Village Poultry Advisors who provide technical advice to farmers, selling inputs, and veterinarian products. These advisors receive a capital of US$ 100 for purchasing the initial stock. Families are given the equivalent of US$ 60 for the purchase of a coop and three hens. expense of the environment. In addition, the promotion Forest farming of high-value livestock could add value of products in connection with ecotourism sites would for farmers and improve ecotourism experiences. For be beneficial for displacing potential pressure example, the forest farming of organic wild boar at from wildmeat. ecotourism sites, integrated with high-diversity forest restoration models, adds value to the livestock and Silvo-pastoral models provide significant benefits provides semi-natural wildlife experiences for tourists. for all stakeholders and the environment. Farmers It also provides conditions for the natural regeneration get access to grazing land, and therefore, do not need of formerly forested areas. These models may also to clear forests for grazing. Local farmers can benefit result in negative emissions compared to conventional from improved genetic material, pasture management, livestock farming systems. CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S and access to markets if a comprehensive approach is developed with the company. For the company, silvo- Proper sanitation and food safety are especially pastoralism increases local acceptance of the plantation important for wildlife farming. Wild meat consumption and reduces social risks, and grazing improves fire significantly increases the risks of zoonotic diseases.112 management and weed control while also increasing Wildlife hunting has been a direct factor in the spread site productivity due to fertilization by manure. In Lao of SARS-CoV-1 and Ebola.113 Today, the most likely origin PDR, such models have been implemented (see section of the COVID-19 is a zoonotic transmission through 5.1) and have led to private-sector initiatives to develop an intermediary host, according to a joint WHO-China technical and market packages to integrate goat farming study on the origin of COVID-19.114 While the potential within tree plantations. Such partnerships between the intermediate host and the modality of transmission of private sector and farmers should be piloted as part COVID-19 are still unknown, the risks associated with of CSLEP. wild meat can be significant.115 Therefore, measures must 112 Lauren Coad and Jasmin Willis, “Impacts of Taking, Trade and Consumption of Terrestrial Migratory Species for Wild Meat” (Secretariat of the Convention on Migratory Species (CMS), 2021). 113 Elizabeth H. Loh et al., “Targeting Transmission Pathways for Emerging Zoonotic Disease Surveillance and Control,” Vector Borne and Zoonotic Diseases (Larchmont, N.Y.) 15, no. 7 (July 2015): 432–37, https://doi.org/10.1089/vbz.2013.1563. 114 WHO-China, “WHO-Convened Global Study of Origins of SARS-CoV-2,” 2021. 115 Global Emergence of Infectious Diseases: Links with Wild Meat Consumption, Ecosystem Disruption, Habitat Degradation and Biodiversity Loss (FAO, 2020), https://doi.org/10.4060/ca9456en. 55 be implemented to reduce the risk of such outbreaks. 4.7. NON-TIMBER FOREST Ensuring proper sanitation represents a significant PRODUCTS (NTFP) ARE AT obstacle to the safe promotion of this activity. Given THE CROSSROADS BETWEEN these circumstances, acquiring an experienced private- sector partner would be essential before further CONSERVATION AND venturing into and expanding this activity broadly. DEVELOPMENT Caution should be applied when promoting wildlife NTFP have been the focus of numerous projects and farming, given its history of negative impacts on interventions. The emphasis of these has varied from conservation. Wildlife farming can benefit species conservation to economic development, depending on conservation only if specific criteria are met (Box 8). For the motivations of the leading proponents. most illegally traded species, these criteria are unlikely to be met, so wildlife farming can further increase NTFP comprise a wide range of products that are problems rather than solve them. rarely clearly defined. For example, the FA includes charcoal, firewood, lower-class wood, and poles in CHICKEN FARMING HAS THE its NTFP definition,116 and Conservation International POTENTIAL TO OFFSET ILLEGAL has agarwood in its NTFP value-chain stocktaking.117 HUNTING FAO uses the term Non-Wood Forest Products (NWFP) instead of NTFP, which explicitly excludes any wood Chicken farming is a widespread activity for livelihood products118. For this section on NTFP, we use the FAO interventions in conservation projects. In the Central definition of NWFP, which includes products collected Cardamoms NP, Fauna & Flora International (FFI) has or grown from natural or planted forests (see Appendix promoted chicken farming for conservation-friendly 2 for more details of this definition). economic development (Box 9). In addition to increased nutritional and economic well-being, chickens provide The importance of NTFPs for household livelihoods an alternative to wild meat, thus reducing hunting varies significantly across the CML. Income from NTFP CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S pressure. So far, sales are primarily at the village scale, ranges from US$50/household/year in the Phnom Aural but in the case of ecotourism sites, sales can represent and Phnom Samkos Wildlife Sanctuaries, to several a substantial income opportunity for villagers aligned hundred US dollars in other areas.119 with sustainable ecotourism practices. 116 Ministry of Agriculture, Forestry and Fisheries, “Prakas #132 on Non-Timber Forest Products” (Phnom Penh, Cambodia, March 2005). 117 Naven Hon et al., “Sustainable Landscapes and Ecotourism in Cambodia” (Phnom Penh, Cambodia: Conservation International, March 2019). 118 Global Forest Resources Assessment 2020 (FAO, 2020), https://doi.org/10.4060/ca8753en. 119 Valuation of Ecosystem Services in the Prek Tnoat Watershed (2nd Draft)” (UNDP: Phnom Penh, 2018). 56 WILD FOREST PRODUCTS SEMI-WILD FOREST PRODUCTS Wild forest products are defined as untended biological Semi-wild forest products are defined as biological resources gathered from forests or wooded land resources, other than wood, that are gathered in forests (Appendix 2). or wooded land and are subject to some form of human intervention to increase productivity (Appendix 2). WILD HONEY — THE MOST COMMON NTFP IN THE CML RESIN — NOT WIDESPREAD NTFP IN THE CML Most communities in the CML are involved in honey collection. One study found that all 20 of the communes Resin is a significant source of income for some surveyed participated in the collection of wild honey.120 communities adjacent to forests in Cambodia. Resin is The COVID-19 crisis has impacted a share of this market, tapped by cutting a wedge-shaped opening at the base but given how widely wild honey is collected, there of a mature Dipterocarpus tree and setting a fire in the is good potential to expand this business to more hole to stimulate resin production. Resin is collected communities over the CML, while following existing from the hole after several days. It represents an models for honey production. important NTFP for many forest-adjacent households, especially in Prey Lang forest and forests in the The model promoted by Cambodian Federation for Mondulkiri and Ratanakiri Provinces. One study in Prey Bee Conservation focuses only on wild honey. This Lang found that forest-adjacent households spent an model was developed by an NGO (Box 10) and does not average of 105 days, annually, on resin extraction, and encourage beekeeping, as this would reduce community they earned a mean annual gross income of US$3,236.122 patrolling activities, and thus, the conservation impact of the business. Beekeeping may only be appropriate Resin collection is much less common in the CML. in degraded areas. One approach already being used Although resin trees exist in the CML, they are different in Cambodia is rafter beekeeping, which mimics large from the species found in other parts of Cambodia, and branches upon which bees form nests using poles in the resin produced is much less valuable.123 Only two of CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S natural forests.121 The company Bee Unlimited supports 20 communities surveyed in one study124 and five of 41 this technique and further improves community households in another study125 in the CML were involved incomes by organizing tours in Siem Reap. Such a in the collection of resin. model could have potential in CML as part of agro-tourism development. 120 Nuppun Institute for Economic Research, “NTFP Value Chain Analysis - Phase 1: Prioritization of NTFPs” (Phnom Penh, Cambodia, March 2019). 121 Eric Guerin, “Rafter Beekeeping - Sustainable Management with Apis Dorsata” (WWF, 2019). 122 Anne-Mette Hüls Dyrmose et al. Economic importance of Oleoresin (Dipterocarpus alatus) to forest-adjacent households in Cambodia. Nat. Hist. Bull. Siam Soc. 62 (1): 67–84, 2017 123 Coad Lauren, Lim Sotheary, Nuon Lim. Wildlife and Livelihoods in the Cardamom Mountains, Cambodia. 124 Nuppun Institute for Economic Research, “NTFP Value Chain Analysis - Phase 1: Prioritization of NTFPs” (Phnom Penh, Cambodia, March 2019). 125 Coad Lauren, Lim Sotheary, Nuon Lim. Wildlife and Livelihoods in the Cardamom Mountains, Cambodia. Frontiers in Ecology and Evolution, Vol. 7 article 296. 2019. 57 Some companies are involved in the extraction of resin evaluation of these models is required to assess their from pine trees. The Jin Jeng Company has been in potential for the CML. Initial findings seem to indicate a discussions with the MoE for a 10-year master plan for low added-value and challenges in terms of production this process, including Kampong Speu, Koh Kong, and quality in the communities manufacturing them.127 Pursat provinces in the CML. The production of bamboo handicrafts focuses on BAMBOO — A WIDE VARIETY OF USES international tourists. This scale contrasts with the THAT TEND TO BE OF LOW VALUE high-skills, export-oriented village-to-factory-scale IN CAMBODIA production in countries like Vietnam and China. The ability of Cambodia to compete at such a scale in this Bamboo is a widely available resource in the CML. It value-chain is uncertain. has been identified as a livelihood activity in 14 of the 20 communes studied in the CML.126 Some examples of higher-end bamboo production exist in Cambodia, but they are small-scale. While Bamboo can be used for a wide range of applications some companies, like Bambusa, produce higher-end in the construction and manufacturing sectors. handicrafts, such as coil plates and bowls for export, Applications include the structural elements, flooring, it remains at relatively small-scale. Larger scale and walls in construction, furniture, houseware, and production for construction and international furniture activated charcoal in manufacturing. markets is only possible in cooperation with specialized companies, possibly requiring the introduction of new Most uses of bamboo in Cambodia are labor-intensive species to become profitable. and have little value-added. Beyond the sale of raw bamboo to be used as scaffolding, bamboo is most Most projects linked with bamboo production are commonly used for the production of incense sticks, located outside the CML. Most bamboo projects are barbecue sticks, and various handicrafts. located in the Mondulkiri Province and the provinces along the Mekong river: Stung Treng, Kratie, and Bamboo sticks are suitable for community-level Kampong Cham. CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S projects but suffer from little value-added. The production of bamboo sticks requires little investment Based on the current situation, the potential for in machinery, making it appropriate for decentralized private-sector partnerships in bamboo appears limited production at the community level. Partnerships with the in the CML. There is a lack of understanding of which private sector for incense sticks production have been bamboo species occur in the CML and what products supported by several NGOs in Cambodia, including the they could be used to produce. The development of World Wildlife Fund and Cambodian Rural Development plantations along rivers and streams to contribute to Team, which funded equipment and training for local reducing erosion while supporting income generation businesses, that, in return, committed to buying the could represent an interesting potential to be studied. products of communities (Figure 22). An independent 126 Nuppun Institute for Economic Research, “NTFP Value Chain Analysis - Phase 1: Prioritization of NTFPs” (Phnom Penh, Cambodia, March 2019). 127 Nuppun Institute for Economic Research, “NTFP Value Chain Analysis - Phase 2: Value Chain Studies” (Phnom Penh, Cambodia, March 2019). 58 Box 10. Cambodian Federation for Bee Conservation (CWHE) The CWHE aims to contribute to protecting Cambodia’s forest resources and improving the livelihoods of communities through the sustainable collection of wild honey and increasing the quality of wild honey products. The CWHE established common standards in terms of sustainable harvesting practices, quality, hygiene, and conservation impact. The company Nature Wild, the business arm of NGO NTFP-EP, has been working for many years to support the production of wild honey from natural forests in the Koh Kong Province. They supported the creation of CWHE and community-based Wild Honey Enterprises. They are now training collectors, packaging, promoting, and distributing the honey to retailers in Phnom Penh and hotels and restaurants across the country. RATTAN — A DECLINING SECTOR There is demand for high-end rattan furniture in WITHOUT HIGH-END PRODUCTS Cambodia, but it is difficult to find manufacturers to NOR EXPORT COMPETITIVENESS produce it. One premium furniture retailer in Phnom Penh is interested in developing higher-end rattan The domestic market for rattan has been in constant furniture, but this retailer finds it difficult to find decline over the past several decades. Rattan has been manufacturers with the skill and vision to create quality, mainly used for furniture manufacturing in Cambodia. contemporary designs. With the increasing purchase power, households tend to prefer wood furniture over rattan, causing demand to The export sector for rattan is small and will struggle decline. Current demand for rattan products is limited to compete with larger players. Only two Rattan to a few products, such as bookshelves and shoe racks Association of Cambodia members are exporting to CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S used by students and lower-income households, and international markets: Khmer Rajana Rattan Handicraft furniture for hotels, guesthouses, and restaurants and Manava. If Cambodia is to compete with big targeting international tourists. In 2015, income for international exporters of rattan furniture, such as workers at rattan furniture workshops was around Vietnam, it will need to support creative actors with US$52/month128, only about 40% of the minimum innovative designs for niche products and markets. wage of a garment factory worker, excluding overtime Farming bamboo and rattan is currently not profitable and benefits.129 As demand and margins from rattan as a village enterprise. Given the low prices of rattan furniture manufacturing continue to decrease, several and bamboo, forest restoration models based on manufacturers have been pushed out of business,130 these species appear to not be profitable131 (Figure 23). and others have transitioned to manufacturing Allowing smallholders to gain FSC certification could wood furniture. bring added value to communities, while supporting the competitiveness of manufacturers for exports. 128 Koulang Chey, Ousopha Prak, and Tam Le Viet, “Sustainable Cottage Industries and the Rattan Association of Cambodia” (WWF Greater Mekong, September 2015). 129 International Labour Organization, “Cambodian Garment and Footwear Sector Bulletin” (Phnom Penh, Cambodia: ILO, March 2016). 130 Nuppun Institute for Economic Research, “NTFP Value Chain Analysis - Phase 2: Value Chain Studies” (Phnom Penh, Cambodia, March 2019). 131 “Building out a Toolkit for Restoration: Economic Assessments from Peru, Indonesia and Cambodia” (Conservation Strategy Fund, November 2019). 59 Figure 22. Community-based production bamboo incense stick in Kratie Province. CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S Photo: CRDT Still, the bamboo and rattan sectors are dynamic. plantation-scale projects aim to develop higher-added- Cambodia joined the International Bamboo and Rattan value products. Leopa signed a Letter of Understanding Organization (INBAR) in late 2019. This international with FA to develop a cross-laminated bamboo plywood organization aims to promote South-South cooperation plant and an acacia plantation in the Stung Treng for the development of a sustainable bamboo and Province on former ELC land, and it is looking for rattan sector. investors. The Malaysia-based Lipp Engineering Sdn Bhd also recently announced plans to establish 25,000 ha Large-scale bamboo plantations are planned for other plantations and build a large-scale bamboo processing parts of Cambodia. The Ministry of Agriculture, Forestry, plant to produce fiber, likely for the garment sector. and Fisheries (MAFF) announced in 2019 that it would provide 40,000 ha to grow bamboo and rattan.132 Several 132 Government to Provide 40,000 Hectares to Grow Bamboo and Rattan,” Khmer Times (blog), June 26, 2019, https://www.khmertimeskh. com/50617935/government-to-provide-40000-hectares-to-grow-bamboo-and-rattan/. 60 MANAGED FOREST PRODUCTS — CARDAMOM – HIGH VALUE AND IN CARDAMOM, TURMERIC, GINGER, DEMAND AND LEMONGRASS Forest farming of high-value cash crops, such as Managed forest products (also called forest farming) cardamom, appears as a promising option for is a type of agroforestry that aims to combine the sustainable livelihoods in the CML. These systems production of crops while keeping or restoring the should be applied in already degraded forest areas and native tree canopy cover. This model is tailored for the should be combined with ecosystem restoration using production NWFPs, such as high-value spices, herbs, tree plantations. and ornamentals, such as orchids. Cardamom is the signature product of the CML and is Managing forests to increase yields of NTFPs increases of high value and in high demand. Cardamom is a high- incomes, but it has varying impacts on biodiversity and value spice used in cuisine and as a medicinal plant. ecosystem services. For example, traditional cardamom The main market is China, but limited supply means cultivation in the understory of natural forests in Sri demand outstrips supply for even the domestic market. Lanka leads to the disturbance of the local ecology. 133 For medicinal uses, cultivated cardamom is preferred as Conversely, in cacao-based agroforestry systems, it tends to have a higher concentration of essential oil despite reducing canopy cover by 40-80%, there are only compared to the wild-grown cardamom.135 minor impacts on biodiversity and ecosystem services, while farmers’ incomes are doubled.134 Cardamom only grows at higher elevations, but such areas exist in the CML. Cardamom is extremely sensitive Forest farming should not be applied in areas of high to elevation, and the right choice of cultivar is essential conservation value. The common interventions in forest for good productivity. The optimal range for cardamom farming — opening the canopy, removing understory is 600-1,500 m elevation. Given this, the potential for species, and applying fertilizers and pesticides — such a crop is limited to Ou Saom and Tatai Leu in impact native ecosystems to some extent. Therefore, the Central Cardamom NP, and in higher elevation CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S such systems should be applied to already degraded parts of the Phnom Aural and Phnom Samkos Wildlife forest areas. Sanctuaries (Figure 24). There is a lot of interest in cardamom, but currently, there is only limited trade in Cambodia. Despite good market demand, the availability of wild cardamom appears to have significantly decreased in recent years in Cambodia, and previous studies could not identify active traders.136 133 Balram Dhakal et al., “Impacts of Cardamom Cultivation on Montane Forest Ecosystems in Sri Lanka,” Forest Ecology and Management 274 (June 15, 2012): 151–60, https://doi.org/10.1016/j.foreco.2012.02.021. 134 Ingolf Steffan-Dewenter et al., “Tradeoffs between Income, Biodiversity, and Ecosystem Functioning during Tropical Rainforest Conversion and Agroforestry Intensification,” Proceedings of the National Academy of Sciences 104, no. 12 (March 20, 2007): 4973–78, https://doi.org/10.1073/ pnas.0608409104. 135 Olivier Ducourtieux, Phoui Visonnavong, and Julien Rossard, “Introducing Cash Crops in Shifting Cultivation Regions – The Experience with Cardamom in Laos,” Agroforestry Systems 66, no. 1 (January 1, 2006): 65–76, https://doi.org/10.1007/s10457-005-6645-1. 136 Nuppun Institute for Economic Research, “NTFP Value Chain Analysis - Phase 2: Value Chain Studies” (Phnom Penh, Cambodia, March 2019). 61 Figure 23. Areas suitable for the cultivations of cardamom (blue) in CML based on elevation. There is great potential for conservation-friendly TURMERIC, GINGER, AND GALANGAL — cardamom cultivated in the understory of degraded UNECONOMIC USING forests. This high-value NTFP with a distinct Cambodian CURRENT MODELS ‘brand’ would be ideally suited to an approach such as that used for Ibis Rice (Box 5) and well as the A pilot for forest farming of spices is being undertaken registration of a Geographical Indication (GI). Iconic in the CML. The model uses a forest farming approach to Cambodian products such as Kampot Pepper and restore degraded forests by planting clusters of native CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S Kampong Speu Palm Sugar have already been registered trees with shade-tolerant spices (turmeric, ginger, under the Geneva Act of the Lisbon Agreement on galangal, and lemongrass; Box 11). Appellations of Origin and Geographical Indications and given international recognition of the brand. Such The current model is not economically viable for an approach must be led by the private sector but the community. A positive NPV is only reached with a would strongly benefit from government support. Some discount rate of 5%, considerably above the 20% used by private companies have also already offered to engage MFIs, thus rendering this approach uneconomic (Figure in the Cardamom Mountains and to collaborate with 25). Under the current assumptions, such a model is local communities. likely to attract neither communities nor private-sector investment. 62 Figure 24. Net Present Value of the Forest farming model under different discount rate. $1,500 $1,000 NPV over 15 years without overheads $500 $0 ($500) ($1,000) ($1,500) ($2,000) ($2,500) ($3,000) ($3,500) 5.0% 7.5% 10.0% 12.5% 15.0% 17.5% 20.0% 22.5% 25.0% 27.5% 30.0% Discount rate Data: Adapted from Conservation Strategy Fund using author assumptions A partial subsidy and use of high-value timber could it attractive to both communities and the private sector. make this approach viable. If a subsidy for land Companies such as Krassna Cambodi have been working preparation were provided and high-value timber, on turmeric and agarwood in the CML, and they could such as agarwood, were used, a positive NPV would be be possible partners for such models. achievable at a discount rate of 20%. This would make CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S Box 11. Forest farming of spices in the Cardamom Moun-tains Caritas Switzerland has been piloting the forest farming of turmeric, ginger, galangal, and lemongrass in a Community Forest (CF) of Pursat province in the CML. The model aims at the restoration of the degraded forest through planting clusters of native trees with spices that grow well under shade and in the acidic sandy loam soils found in CFs. The model is a community enterprise where 30% of farmers’ incomes are shared with the CF Management Committee and used to finance the CF Development Fund that covers costs of forest management and development. There are significant difficulties with this model in terms of management and sub-optimal economic performance. Based on preliminary evaluation, a positive NPV is achieved only with a discount rate of 5%, considerably below the 20% offered by MFIs. As a result, this model is not viable for communities. 63 Figure 25. Lemongrass essential oil, sold in retail outlets and spas in cities; grown by communities in Central Cardamoms National Park. Photo: Fauna & Flora International LEMONGRASS ESSENTIAL OIL – A plantations, one of the main deforestation drivers in the NICHE PRODUCT THAT IS NOT region, provide greater returns in a shorter time and are CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S GREATLY REPLICABLE therefore more attractive to farmers. A partnership between a community, NGO, and private- Increasing production, diversifying markets, and sector partner produces lemongrass oil for stores and adding value are priorities for making this model more spas in urban and tourism centers. Farmers cultivate viable. Currently, the product is not packaged, and the the lemongrass with Flora and Fauna International community does not have access to other markets or (FFI) and Bodia Cambodian Apothecary, who provide a platform to receive orders. FFI is working with the technical support and funding (Box 12 and Figure 26). community to address this challenge. Consideration should be given to building on this model, rather than Despite a relatively high price, the longer timeframe looking at replicating it at other sites. for a return on investment for lemongrass oil makes it difficult to compete. Returns for banana production in 64 Box 12. Essentials oils from Central Cardamoms National Park A partnership between communities in Tatai Leu, Central Cardamoms National Park, Flora and Fauna International (FFI), and Bodia Cambodian Apothecary supplies lemongrass essential oil to stores and spas in Phnom Phem and Siem Reap. The lemongrass is cultivated by farmers (nine women, and one man who acts as manager and bookkeeper). Bodia provides technical support in setting up the production unit as well as buying the essential oil, and FFI supports the community in business and production management. Increasing production, diversifying markets, and adding value are priorities for making this model more viable. A flask of 10 ml of lemongrass essential oil retails around US$ 5-7 in Phnom Penh, whereas the Tatai Leu community sells their unpackaged production at an equivalent of US$ 1 for 10 ml. The community sells raw essential oil to Bodia because it is not able to filter the oil and package it for other markets, and it does not have a platform to receive orders. Bodia encourages the community to sell the essential oil to other companies, because if the community increases production and decreases production cost, all the actors in the supply chain will benefit. FFI is currently working with the communities to develop packaging at the production facility, but significant capacity development will still be required for managing suppliers and customer relationships. Bodia pays significantly more than the market price of lemongrass oil from Thailand, and spends significant efforts in supporting community production, indicating that this partnership is also based on corporate social responsibility and marketing of a high-quality ‘made in Cambodia’ product. Despite a relatively high purchase price for a product produced in the village, the longer return on investment for this product makes it difficult for it to compete with banana production, one of the main deforestation drivers in the region. CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 65 CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 66 05 BARRIERS TO ENABLING CONSERVATION-FRIENDLY ECONOMIC DEVELOPMENT A RELATIVELY WEAK REGULATORY 5.1. PROTECTED AREA FRAMEWORK REGULATIONS The Ministry of Environment (MoE) is responsible for overall environmental governance in Cambodia. That PAs in Cambodia are governed by the Protected given, environmental governance is a cross-sectoral Area Law (2008). Article 1 states “This law defines issue that requires strong collaboration with other the framework of management, conservation, and agencies, most notably, the Ministry of Agriculture, development of protected areas.”138 Several zones are Forestry and Fisheries (MAFF). For a summary of the defined within PAs, including Sustainable Use Zones jurisdiction of these two agencies, see Box 13. (SUZ) in which the Community Protected Areas (CPAs) are located. For a description of CPAs and the zones Significant strengthening of the legal framework within PAs see Box 2. that enables conservation-friendly development is required. The review detailed in this report of the ACTIVITIES ELIGIBLE IN SUSTAINABLE primary laws, sub-decrees, and Prakas137 (we use Prakas USE ZONES and declaration interchangeably in this report) shows that the legal framework varies significantly depending Allowable activities in the Sustainable Use Zone are on the type of intervention considered, but it is generally restrictive for local communities. Chapter 4, Article 11 of weak. The following sections outline those weaknesses the PA Law (2008) allows development and investment and possible remedies. activities in the SUZ. However, Chapter 5 of the PA Box 13. Jurisdiction for natural resource management in Cambodia CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S The Ministry of Environment (MoE) is responsible for implementing the Protected Area Law and associated regulations, which govern National Parks, Wildlife Sanctuaries, and other types of Protected Areas. In addition, the MoE manages the Community Protected Areas (CPAs) within it. Overall, the MoE’s jurisdiction spans over 41% of Cambodia’s land (For a description of CPAs and the zones within PAs, see Box 2). Ministry of Agriculture, Forestry and Fisheries (MAFF) is responsible for implementing Forestry Law and associated regulations, among other duties. The Forestry Administration (FA) is an authority under MAFF responsible for managing the Permanent Forest Estate (incl. Production Forests) and Community Forests. FA has jurisdiction over the transport of timber and non-timber products outside of PFE and PAs and is in charge of overall law enforcement for trade violations. It also oversees the REDD+ mechanism in Cambodia. In addition, MAFF is responsible for ELCs and wildlife trade, both domestically outside PAs and internationally, including administering CITES in Cambodia. 137 A Prakas is a ministerial or inter-ministerial declaration signed by the relevant minister(s). A Prakas must conform to the Cambodian Constitution and to the law or sub-decree to which it refers. 138 Protected Areas Law 2008, Article 1. 67 Law as well as the zoning guidelines139 do not include opportunities which are potential in community and commercial activities beyond the collection of NTFPs for climate change adaptation strategy.” These provisions traditional and customary use by local communities. considerably limit opportunities for communities to engage in economic development. A declaration is needed to allow further economic activities in Sustainable Use Zones – under certain In addition, CPAs suffer from burdensome regulations conditions. This should define eligible activities in line to operate formally. The 2002 Forestry Law’s chapters with conservation principles, which will provide some on Permits and Authorizations (Articles 24 to 27), and on form of security to investors. Given that economic Prohibition on Harvesting Forest Products & By-Products activities can impact natural resources, in some cases, (Articles 28 to 39), are either burdensome or outright management plans will be required, and safeguard prevent activities that would be useful from a CFEA processes must be applied. business standpoint. Given the small scale of the CPAs, these complex regulations significantly increase the CPAS FACE RESTRICTIONS ON cost of operation compared to larger-scale businesses. COMMERCIAL FOR-PROFIT ACTIVITIES COMMUNITIES CANNOT DIRECTLY The CPAs’ purpose is to achieve a balance between ENGAGE IN PARTNERSHIPS WITH THE sustainable natural resources management and local PRIVATE SECTOR socio-economic development. The PA Law Lexicon defines CPAs as “Participation of local communities The present legal framework contains no provisions or indigenous ethnic minorities in an elected form of allowing CPAs to engage in partnerships with the administrative structure, recognized by the Nature private sector. CPAs cannot sign contracts except with Protection and Conservation Administration, with the MoE. The Guideline on Procedure and Process for joint purpose of management and sustainable use of Community Protected Area Establishment (2017) states natural resources in a particular part of the protected in Article 21 that “the CPA committee shall have rights, area, aimed at promoting the standards of living of the roles and responsibilities as below: Represent CPA to CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S local community and indigenous ethnic minorities.” sign agreements on CPA management with the General Directorate of Local Community of the Ministry of Nevertheless, economic activities for CPAs are highly Environment.” Neither the guideline nor any other law restricted in current regulations. According to the PA or regulation contains provisions on the right of CPAs to Law (2006) uses of natural resources within a SUZ are contract with private organizations. limited to traditional uses and customary practices at the family-scale (Article 22). Furthermore, such activities A legal avenue is required to enable communities to in the SUZ are limited to activities within the CPA engage with the private sector to restore degraded (Article 23), and communities may not have the right lands and to increase their user rights beyond to work forestlands in CPA (Article 26). Article 6.4(d) in traditional or customary uses. Such provisions are the Guideline on Procedure and Process for Community needed to promote conservation-friendly economic Protected Area Establishment (2017states that in writing development models in collaboration with the its management plan, the CPA may only look to a future private sector. possibility of engaging in “small scale enterprise 139 GDANCP, “Zoning Guidelines for the Protected Areas in Cambodia” (Phnom Penh, Cambodia: General Directorate of Administration for Nature Conservation and Protected, Ministry of Environment, 2017). 68 CPAS’ AGREEMENTS WITH MOE to use land in this zone shall have prior agreement from PROVIDE WEAK TENURE PROTECTION the Ministry of Environment in accordance with the Land Law.” While many PAs haven’t been properly zoned Investment in forestry requires longer than the current yet, there is a lack of management plan and governance 15-year agreements for CPAs. The PA Law (2008) sets a in Community Zones. The development of management 15-year period for CPA agreements with MoE (Article 25). plans accepted by the local stakeholders and their This duration considerably limits the viability of many enforcement is essential to achieve socio-economic business models that require longer-term engagements, and conservation objectives. It is also a prerequisite to especially in forestry. Even in the case of fast-growing attract responsible investors in CFEA and support the tree plantations, if investors cannot be guaranteed at development of CFEA with PES such as Ibis Rice. least two crop rotations, they are unlikely to commit to a project. The 15-year limit means development models providing long-term benefits will not be viable, which 5.2. FISCAL REGULATION goes against sustainable landscape management. RELATED TO FOREST PRODUCTS CPA agreements should be increased to at least 30 years. A 30-year agreement appears to be the minimum APPLICABLE FEES AND ROYALTIES necessary to attract private investors and create long- FROM CPAS term shared value. This duration still remains much The Cambodian regulatory framework regarding forest lower than that granted under ELCs or PPPs with the products strongly favors private-sector investment Forestry Administration and might need to be further in forest plantations rather than the sustainable expanded as the sector matures to allow for higher- management of natural forests. Owners of private value timber production. plantations registered to the FA are exempted from A 2020 circular might result in CPAs’ loss of land. A harvesting, processing, and transportation fees of 2020 circular that allows households that have been timber and non-timber forest products (Forestry Law article 52; Declaration on the Development of Private CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S living inside PAs for 10 or more years to claim official land title potentially provides tenure security for Forest Article 9). On the other hand, forest products individual families, but it also has the potential to fuel and by-products from natural forests, including CFs land speculation and to promote the fragmentation of and, by extension, CPAs, are required to pay premium PAs and CPAs. (Circular 06 on Measures and Criteria of and royalty fees. This anomaly penalizes all the wood Granting State Property to Citizens and Civil products that could be produced in CPAs, despite Servants [2017]). their social and environmental impact, and should be addressed to support the development of CFEA. THERE IS A LACK OF MANAGEMENT PLANNING IN COMMUNITY ZONES INCENTIVIZING INVESTMENTS IN PAS AND CPAS In addition, there is a lack of management planning and government engagement in Community Zones to Obstacles to doing business in CPAs should be removed promote CFEA. Community Zones are complex due to the and incentives should be promoted. Doing business existence of villages and agricultural fields. Article 11 of in Cambodia is already relatively difficult. Cambodia is the PA Law states that: “Issuing land title or permission ranked 144 out of 190 countries regarding the ease of 69 doing business.140 For the reasons outlined above, doing Highly uncertain and contested land tenure is a source business in PAs involves significant additional burdens of conflict affecting many stakeholders. That is true in and risks to investments. It is, therefore, essential to many parts of Cambodia, and notably, in the CML. The have a regulatory framework incentivizing projects that lack of clarity of tenure poses threats to vulnerable benefit conservation and local development. people at risk of losing access to land. Besides, uncertain and contested land tenure impacts businesses with Exemptions for qualified investments could be delays, additional costs, and reputational risks. These extended to smaller-scale partnerships with the risks tend to deter responsible investors and restrict private sector in CPAs. Cambodia already has fiscal activities to only those over short-term projects with incentives to encourage investments under the a very high return on investment. As a result, there Qualified Investment Project. This program provides is little potential for businesses to engage in more an exemption from import, export, and profit taxes inclusive activities with high conservation co-benefits. for a given period. 141 Still, it restricts the fiscal benefits For example, the Ibis Rice model requires secure land to large-scale plantations only (>1,000 ha for teak tenure with all fields mapped within the Community plantations and 200 ha for short-rotation crops). An Zone of a PA that has been zoned and where there is an amendment should be made to allow smaller-scale agreed-upon land-use plan (Box 5). private sector partnerships in PAs to meet the necessary safeguards to benefit from the same fiscal regulation, The Economic Land Concession (ELCs) scheme was thus increasing their competitiveness in the market. designed to attract long-term investment in the agricultural and forestry sectors. ELCs granted land concessions to private companies for up to 50 years. 5.3. LACK OF SECURITY In theory, the objectives of the scheme were similar to IN LAND TENURE LIMITS what those of private sector engagement on CFEA in INVESTMENTS AND LOCAL PAs should be: to support “employment in rural areas OPPORTUNITIES within a framework of intensification and diversification of livelihood opportunities and within a framework of CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S natural resource management based on appropriate Lack of security of land tenure and conflict over ecological system.”142 In practice, access to land and land are the primary causes of concern for investors livelihoods for many households were impacted, and project developers in Cambodia. These issues even in the case where the ELC provided employment must be addressed to achieve sustainable landscape opportunities143, and large areas of forest experienced management and support conservation-friendly land-use change.144 economic development. 140 he World Bank, “Doing Business 2020: Comparing Business Regulation in 190 Economies” (Washington, DC, 2020). 141 The Law on the Amendment of the Investment Law (2005) 142 Royal Government of Cambodia, “Sub-Decree on Economic Land Concessions - Unofficial Translation.” (Phnom Penh, Cambodia, December 27, 2005). 143 Petr Drbohlav and Jiri Hejkrlik, “Social and Economic Impacts of Land Concessions on Rural Communities of Cambodia: Case Study of Botum Sakor National Park,” International Journal of Asia Pacific Studies 14 (January 15, 2018): 165–89, https://doi.org/10.21315/ijaps2018.14.1.7. 144 Kyle Frankel Davis et al., “Accelerated Deforestation Driven by Large-Scale Land Acquisitions in Cambodia,” Nature Geoscience 8, no. 10 (October 2015): 772–75, https://doi.org/10.1038/ngeo2540. 70 A “Leopard-Skin” approach has been promoted by a land title.148 In the short term, this procedure might RGC to develop activities around the smallholders to create some uncertainty. Still, it could reduce potential avoid displacing them. To address the challenges of the conflicts from unclear land tenure in PAs and CPAs in ELC model, the RGC promotes the leopard skin model the long term. However, careful monitoring must ensure where “actual possession” is considered, even if it is not that it does not increase land grabbing and fuel land legally recognized. Where this model has been used, speculation in already vulnerable CPAs. concessionaires have in some cases even supported the titling of smallholder farms. The approach was legalized For communities in CPAs to benefit from new titling in 2012 and expedited the systematic issuance of private opportunities, Prakas and management plans are land titles. It also directed companies not to develop urgently needed. Many of the CPAs with good potential land cultivated by local communities. 145 for CFEA do not have a Prakas or management plan. Those that do have such plans often lack proper The “Leopard-Skin” approach still encounters demarcation, making the land vulnerable to land difficulties for developers. The approach relies heavily grabbing and attractive to investors. These functions of upon uneven power relationships, at the local level, the PA management must be given priority. for negotiations over land between local communities, concessionaires, and state officials. Unscrupulous land brokers have played a role in alienating farmers from 5.4. INADEQUATE SKILLS AND the land and then selling it to companies at a high TRAINING OF LOCAL PEOPLE margin.146 AND WEAK INSTITUTIONAL CAPACITY Successful conservation-friendly development in CPAs will need to address the land issues that have plagued other models. The CPA zoning process has not always There is a strong need for Technical and Vocational been fully understood by households, resulting in the Education and Training (TVET) on CFEA. The CFEA allocation of some forested land owned by families as significantly differs from business as usual with CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S CPAs during land-use mapping workshops. Most village 147 the integration of multiple production models (e.g. and commune authorities allow farmers to expand their agroforestry models) as well as a focus on high-value farms in CPAs, which opens the door to speculation on production (e.g. forest farming models). Due to these CPA land and land grabbing by powerful actors. differences, significant TVET is needed to support CPA members in adopting these CFEA and playing a stronger A new directive allows households that have been role in partnerships with the private sector. Identifying living inside PAs for 10 years or more to claim an the most promising CFEA in each CPA and technical official land title. To address this issue of land grabbing skills of CPA members on these value chains is essential and illegal land-use change, in July 2020, the RGC to support conservation-friendly development. published a circular allowing households that had been living inside PAs for more than 10 years to claim 145 Directive 01BB: Measures Reinforcing and Increasing the Efficiency of the Management of Economic Land Concessions 146 Dwyer, Michael B., Emily Polack and Sokbunthoeun So (2015) “‘Better-practice’ Concessions? Some Lessons from Cambodia’s Leopard Skin Landscape” in Large-Scale Land Acquisitions: Focus on South-East Asia, International Development Policy series No.6, Geneva: Graduate Institute Publications, Boston: Brill-Nijhoff, pp. 205–228. 147 Sopheak Chann, “Making Place and Creating Frontiers: Examining Land and Resource Struggles in Cambodian Post-Conflict Resource Landscapes,” The Geographical Journal, November 13, 2019, https://doi.org/10.1111/geoj.12340. 148 Circular 06 “Granting State Property to Citizens and Civil Servants”. https://www.phnompenhpost.com/national/minister-tells-governors- speed-land-allocation 71 The skills and training of local people may not be Models relying on contract farming will struggle with adequate for the enterprises needed. An inadequately low levels of professionalism among farmers. Few educated workforce is among the top constraints farmers in remote areas see agriculture as a business that businesses face in Cambodia.149 While highly that they are willing to invest in developing. Identifying heterogeneous, the people living in PAs are poorer entrepreneurial farmers and supporting them in and have lower levels of education than the national improving their capacities is essential for a contract- average. People may lack both the “hard” and “soft” farming approach to thrive. In addition, household skills required for meaningful participation in new debt is high in rural Cambodia, thus preventing some enterprises. Private companies wanting to invest in households from being able to invest. Addressing CFEA will likely have difficulties finding the local labor these issues will require investment or guarantee with the hard skills they need and will face significant beyond the private sector partner, as the need to build training costs for their operations. In addition to capacity among contract farmers and investment in hard skills, there is a general lack of “soft” skills in their operations increases the costs of the contract the labor force, in terms of communication, critical farmer model compared to conventional farming, thus thinking, and problem-solving skills, which will affect challenging the competitiveness of this model. the most innovative CFEA.150 Identifying training needs for local people and addressing them is required as a prerequisite to meaningful engagement of locals in 5.5. HIGHER COSTS TO ACCESS new enterprises. MARKET AND INFRASTRUCTURE Sufficient capacity of CPA Management Committee Remote areas often lack basic infrastructure, such is critical for the implementation of community- as reliable water, electricity, and all-weather roads. based CFEA.151 Good organization and mobilization In many areas where needed infrastructure does not of community members, and good management of exist already, investors in Cambodia are required to finances for maintenance and re-investment activities build their own. This, however, significantly increases are essential for any enterprise, but are especially the costs of operations. For some of the already CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S important for longer-term investments needed for marginal value chains detailed in this report, the cost some CFEA. While private-sector partners may assist of infrastructure may render them uneconomic. That in addressing this challenge, the limited CPA capacity will be an issue, especially when working with a mosaic will impede business models that rely heavily on CPA of CPAs, thus multiplying infrastructure development Management Committee or farmers’ cooperatives. complexity. Besides, a wide range of necessary inputs Identifying and addressing training needs for CPA might not be locally available, requiring the enterprise committees is required as a prerequisite to meaningful to secure supply itself. investments in CPAs. 149 2016 Cambodia Enterprise Survey. World Bank Group. 2016. https://elibrary.worldbank.org/doi/abs/10.1596/28473 150 Wendy Cunningham and Claire Honore Hollweg, “Cambodia’s Future Jobs: Leveraging Integration for Better Jobs” (Washington, DC: World Bank, n.d.). 151 USAID ProLand, “A Sourcebook for Community-Based Forestry Enterprise Programming: Evidence-Based Best Practice and Tools for Design and Implementation.” (Washington, DC: USAID, 2020). 72 5.6. COMPETITION WITH THE Added incentives are needed for sectors exposed to competition from the informal sector. Commercial INFORMAL SECTOR development of NTFPs and forest products, like charcoal, Conservation-friendly enterprises cannot always that face unfair competition from the informal sector compete with products from the informal sector. This should be granted incentives, such as VAT exemptions, situation is especially true for value chains dominated by to allow the enterprise to develop and transition the informal sector (e.g. charcoal) with high costs linked the sector towards better social and environmental to certification or other formalization. Competition with performance. These fiscal incentives could be granted the informal sector is the top constraint businesses face for investments inside PAs in collaboration with CPA in Cambodia.152 In the case of CFEA, private companies members only and could be based on their positive may have to compete against businesses with poor social and environmental externalities. environmental and social practices that do not pay VAT or any other taxes and do not adequately compensate or care for their workforce. CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 152 2016 Cambodia Enterprise Survey. World Bank Group. 2016. https://elibrary.worldbank.org/doi/abs/10.1596/28473 73 CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 74 06 PLANNING FOR CONSERVATION-FRIENDLY ECONOMIC DEVELOPMENT This section of the report will focus on planning for Workshops linking local and regional businesses with conservation-friendly development in PAs and CPAs. communities and NGOs have good potential to identify This includes multi-stakeholder platforms to support sustainable pathways for economic development. Such dialogue, mapping potential areas for each CFEA, workshops could support the CFEA identification as well synergies with infrastructure development, building as building local capacities and building connections stakeholder readiness to engage with the private sector, between stakeholders. It could also contribute to and Free, Prior, and Informed Consent (FPIC). the development of a Theory of Change which could become a roadmap for conservation-friendly economic ESTABLISH A MULTI-STAKEHOLDER development in the landscape. PLATFORM TO SUPPORT DIALOGUE The Theory of Change (ToC) approach has great AND A SHARED VISION FOR CFEA IN potential as a tool for stakeholder engagement and the PAs collective testing of the assumptions.154 The ToC focuses Private-sector investment in PAs has not resulted on understanding how the system works, and therefore, in the desired conservation outcomes in the past. pushes the actors to explicitly state their collective Positive narratives of conservation outcomes did not beliefs and reveals differences in the assumptions always materialize from previous attempts at private- among stakeholders.155 Building prospective scenarios sector partnerships. If the root causes of these failures together with the different stakeholders can support are not understood, new partnerships might push the identifying potential pathways for developing applicable conversion of natural ecosystems further. CFEA and what is required to get to the desired outcome. Developing sustainable pathways for economic A Theory of Change for CFEA in the landscape should development in PAs requires system thinking and be developed and regularly updated. That would better inclusion of the agency of private actors, support better integration of CSLEP project components, government, and local stakeholders. The various bringing synergies and mitigation of potential adverse actors operating in these landscapes (indigenous outcomes. This approach will help to identify suitable CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S communities, migrant workers, land investors, private value chains, CFEA, locations, and private sector companies, conservation NGOs, and the government) partners. It will also assist in avoiding investing in areas have fundamentally different objectives, knowledge, where the socioeconomic and ecological dynamics are and visions. For collaboration to happen, it is not not favorable. necessary to share a common goal or even to have a shared vision of the future of the landscape, but it is necessary to have a shared understanding of how the world works and how it could change to explore sustainable pathways.153 153 Claude A. Garcia et al., “The Global Forest Transition as a Human Affair,” One Earth 2, no. 5 (May 22, 2020): 417–28, https://doi.org/10.1016/j. oneear.2020.05.002. 154 A Theory of Change is a detailed description and illustration of how and why a desired change is expected to happen in a particular context. The ToC is developed by first identifying the desired long-term goals and then working backwards from these to identify all the conditions (outcomes) that must be in place (and how these related to one another causally) for the goals to occur. These are all mapped out in an Outcomes Framework often in a visual or ‘flow-chart’. Adapted from https://www.theoryofchange.org/what-is-theory-of-change/ accessed on 30 March 2021. 155 Craig Valters, “Theories of Change in International Development: Communication, Learning, or Accountability?,” London School of Economics and Political Science Justice and Security Research Programme, no. 17 (2014). 75 ASSESS POTENTIAL SYNERGIES Assessing the eligibility of a CPA to a given CFEA will WITH EXISTING PRIVATE SECTOR pose some complex questions. These include: INVESTMENTS • What level of degradation in a CPA means that part The promotion of outgrowers scheme may have good of it can be cleared for a non-native tree plantation? potential for communities around existing private • In the case of forest farming for understory crops, sector investments. Investing in CFEA might be more under which conditions can the understory be attractive to the private sector if potential CPAs are cleared, or what level of thinning can be done? close to their current investments. That would allow the private sector to limit the risks in securing material • If criteria are established for the previous sourcing while expanding their operations more questions, how can we ensure that this is not sustainably. During the planning phase, a specific focus creating incentives to increase forest degradation should be placed on identifying private partners in so that partially degraded land becomes eligible the landscape willing to partner with CPA members to for investment? develop CFEA. Guidelines will be needed to identify the levels of A significant barrier to meaningful discussions with degradation in a CPA, and the different types of CFEA the private sector is a lack of mapping of potential allowed. Activities should only be allowed if the area areas for CFEA. Different value chains are suitable was already degraded for some period (e.g. 5 years, for different parts of the CML. The degradation of CPA 10 years, etc.) to avoid creating incentives for further management blocks needs to be determined to assess forest degradation. This approach is used by carbon what CFEA are suitable. Accordingly, a mapping exercise finance standards like the Gold Standard, which bans for the CML needs to be undertaken to identify priority reforestation projects on lands that were forested in the CPAs for different value chains. last 10 years.156 Similarly, directives 01 and 06, allowing titling of lands in PAs, require the lands to have been Land-use planning is an essential part of developing cleared and occupied for at least 10 years.157,158 CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S CFEA. Land-use plans for PAs and CPAs are critical for determining where production should be located Zoning of CPA areas eligible for different CFEA could within a CPA and for compliance with CFEA once it is use a similar approach as the one developed for established. As in the case of the Ibis Rice model REDD+ projects. Future work could use new LIDAR (Box 5), the whole compliance system and therefore, satellite imagery to better estimate the level of forest conservation outcomes, rely on a widely accepted land- degradation and map the potential for CFEA involving use plan. Therefore, it is recommended that land-use significant land preparation work. At the local level, a plans be developed for all CPAs where CFEA are to fine-grained mosaic approach should be implemented be implemented. to keep corridors of natural ecosystems, as well as to maintain customary uses of these ecosystems. For the most disruptive business models, a conservation- friendly version of the leopard skin approach should 156 Gold Standard, “Land Use & Forests Activity Requirements - Version 1.2.1,” April 2020, https://globalgoals.goldstandard.org/standards/203_ V1.2.1_AR_LUF-Activity-Requirements.pdf. 157 Circular 06 “Granting State Property to Citizens and Civil Servants”. https://www.phnompenhpost.com/national/minister-tells-governors- speed-land-allocation 158 Directive 01BB: Measures Reinforcing and Increasing the Efficiency of the Management of Economic Land Concessions 76 Box 14. Criteria for selection of CFEAs in PAs Conservation impact Shared value • How does the business impact the environment? • Does the project support fair & transparent benefit- • Which actions will be used to mitigate this impact? sharing? • Does it contribute to displacing wood demand away • Does the project lead to improved infrastructure for the from natural forests? local population? • Does it contribute to PA financing? • Does the project contribute to commune development • Does it support ecosystem restoration using native fund? species? • Does the project allow local farmers to participate in • Does it provide incentives for the local population to intercropping, silvo-pastoralism, or NTFP collection? switch to conservation-friendly practices? • Will the project support an outgrowers scheme? • Does the production support a shift to sustainable consumption models on the demand-side? Climate change mitigation & resilience • Does the project contribute to building resilience to Social safeguards future climate change? • Is the project undertaken with FPIC using an • Does the project increase local people’s resilience to independent third party? climate change? • Has a dialogue platform been created among the • Will the project support the shift to a low-carbon company, local authorities, & the local community? economy? • What measures has the company implemented to secure customary rights? Sound business model • Are the assumptions & expectations realistic? Jobs creation • Has the business model already been applied CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S • What is the job creation potential of the project? elsewhere? • Who will benefit from the job creation? • Has the product already reached the market? • Will the project include local processing & packaging? • Will the production in CPAs affect the product • Are the required skills available locally? characteristics? • Does the project include vocational training so locals • Does the business model include costs & constraints can take up higher-skills positions? related to work in CPAs? • Have the investors already been identified? 77 be used to ensure that it does not negatively affect project through regular monitoring by local authorities biodiversity. In all circumstances, the engagement of and social impact assessments. the private sector for CFEA should only be considered as a tool for local economic development and sustainable BUILD STAKEHOLDERS’ READINESS TO landscape management, which will be applicable in ENGAGE WITH THE PRIVATE SECTOR some situations only. There is limited capacity to get CPAs project-ready. FREE, PRIOR, AND INFORMED Currently, the MoE has limited capacity to engage CONSENT (FPIC) FOR PRIVATE SECTOR potential businesses actively, structure projects, assess INVESTMENT IN CFEA their economic viability and the social and environmental impacts, negotiate fair benefit-sharing agreements, and The PA Law (2008) requires consultations with monitor project implementation. The MoE also does local communities, among others, but it does not not have transparent procedures in place that would stipulate their nature. Article 11 allows the MoE to allow communities or the private sector to initiate permit development and investment activities in the this process. This could result in missed opportunities Sustainable Use Zone after consultation with relevant and repercussions from a lack of transparency in the ministries and institutions, local authorities, and local decision-making process. It also increases the potential communities. The history of private-sector partnerships for detrimental social or environmental outcomes. The in the landscape has significantly impacted local people CSLEP project should support the development of clear and indigenous populations, which can be seen with the and transparent procedures for engaging the private widely documented displacement of communities. The sector in partnerships with the MoE, CPA committees, process of FPIC should be applied to ensure that the and communes and should include guidelines for fair project does not negatively impact local communities benefit-sharing. and indigenous groups. (See Appendix 3 for the main principles of FPIC). Assessing private sector investment in CPAs should follow set criteria that look at multiple benefits. These CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S FPIC can support the securing of investments by should include how the investment can contribute reducing land encroachment by local people and to increased quality of life, protection of biodiversity, new migrants. It is recommended to have an external climate change mitigation, and building local resilience. facilitator, or NGO, steering the FPIC process to avoid The assessment should ensure that the investment does blurring the line between the public sector, the not negatively affect some part of the local population. community, and private interests, as can be observed in some previous ELCs.159 The FPIC process is a lengthy Significant capacity building is necessary to enable and costly process, which can prevent the private sector local communities to participate in CFEA in CPAs. from supporting small-scale projects. Consideration Communities require substantial strengthening of should be given to providing funding to local NGOs to technical, entrepreneurship, and governance skills to help the process by providing independent awareness- play an important role in the different business models. raising and legal advice. The respect of the agreements External support to complement the MoE’s capacity by all parties should be monitored, and a grievance would considerably help fill these critical gaps in the mechanism should be established at the commune short run. council. The FPIC principles should continue beyond the 159 Michael B. Dwyer, Emily Polack, and Sokbunthoeun So, “‘Better-Practice’ Concessions?: Lessons from Cambodia’s Leopard-Skin Landscape,” in Large-Scale Land Acquisitions, ed. Christophe Gironde, Christophe Golay, and Peter Messerli, Focus on South-East Asia (Brill, 2016), 205–28, https:// www.jstor.org/stable/10.1163/j.ctt1w76v19.16. 78 Figure 26. Impacts of roads on deforestation in the CML Protected Areas Financial support from RGC and development partners SYNERGIES WITH INFRASTRUCTURE is needed to ensure equitable power relationships DEVELOPMENT between communities and companies. CPA members may require external support to ensure that they One of the key activities financed by CSLEP is are not overly dependent on private companies improved connectivity. This activity will increase the and trapped into disadvantageous commercial competitiveness of the ecotourism sites and reduce relationships. Communities should be supported in transportation costs for communities and for the the development of their own organizational, technical, transport of forest and agricultural products, thus CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S and legal capacities and their ability to invest in their making these areas more attractive for private sector own infrastructure. An assessment of credit schemes investment. Although the project will only invest in with CFs and CPAs showed that they “can successfully improving existing roads, these activities might lead apply for, execute and repay credits, provided they are to higher pressure on the existing forest resources, supported to make foundational improvements in the along with the expected increase in land value. While areas of legal compliance, transparency, accounting anecdotal, the correlation between road construction systems, and overall financial administration.” 160 and land-use change appears strong.161 A GIS analysis (Figure 27) of the deforestation trends in Protected Areas of CML shows that 89% of the forest cover change is located less than 5 km from roads. A way to address the negative impacts of road development is to ensure that priority support for sustainable economic activities is provided to those communities in key risk zones as well as to improve law enforcement in these areas to promptly identify and address land grabbing threats. 160 James Bampton, Thomas Enters, and Ratana Pen, “Study on Effective Sustainable Forest Financing Mechanisms in Cambodia” (Phnom Penh, Cambodia: Partnership Program for Forestry and Fisheries in Cambodia (PaFF), 2021). 161 The improvement of the roads from Snoul to Mondulkiri caused “massive small-scale deforestation and increasing illegal logging in Snoul Wildlife Sanctuary”. Delux Chhun, “Drivers of Forest Change in the Greater Mekong Subregion: Cambodia Country Report” (USAID Lowering Emissions in Asia’s Forests, September 2015). 79 CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 80 07 POTENTIAL OF THE JOB CREATION ECONOMIC ACTIVITIES CONSERVATION-FRIENDLY 7.1. FRAMEWORK TO ASSESS Several indicators were used to assess the impact of CFEA on jobs (Table 1). Some jobs will be highly seasonal THE IMPACT OF CFEA ON JOBS or during some specific phases of the business cycle and might interfere with current agricultural practices The creation of a high number of quality jobs is (e.g. planting trees in a plantation overlapping with rice essential to transition from non-sustainable illegal season). Some jobs will require specific levels of skills livelihood activities to conservation-friendly economic that might not be available locally, and therefore, will activities. In that context, it is crucial to prioritize the not bring benefits to the local population and therefore CFEAs with the highest potential of quality job creation. might not achieve the expected conservation impacts. A job is defined in this report as any income-earning Instead, it might increase migration inside PAs. The activity that is not illegal. 162 In that sense, a job is a remuneration potential will also vary from one position range of income-earning activities that can be carried to another. In some cases, the impact on the local out at different times of the year. A wage-laborer on a population might be limited compared to the baseline farm, a full-time worker for a plantation company, and situation. Some value-chains might create more jobs someone who collects and sells NTFP are all considered than others, but these jobs could be of lower quality job-holders. Beyond the quantification of the job and will have less potential to displace non-sustainable potential, an assessment of the potential of CFEA to livelihoods activities. Therefore, a good understanding create jobs needs to look at other critical aspects, such of these impacts and the potential trade-offs is essential as job quality and job accessibility. to ensure that the CFEA selected provides a net positive impact to the local population (see Table 1). Table 1. Matrix for assessing the direct impact of CFEA on jobs Outcome Indicator No. of wage-employed CFEA participants Job creation No. of Full-Time Equivalent (FTE) jobs created by the CFEA CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S Job creation New enterprises No. of newly established firms with more than one paid employee Self-employed No. of self-employed CFEA participants Worker productivity Ave. output per worker among CFEA participants No. of project beneficiaries covered by social security insurance Working conditions and Share of CFEA participants reporting satisfaction with their job and safe Job quality benefits working condition Ave. No. of hours worked per CFEA participants per week Earnings/ Livelihoods Ave. annual earnings of CFEA participants Labor force participation Labor force participation rate among CFEA participants Disaggregation of previous indicators by gender and/or age Job access Access and Opportunity for Jobs Disaggregation of previous indicators with the share of CFEA participants coming from local community for qualified and non-qualified positions Adapted from the World Bank Job M&E Toolkit163 162 Wendy Cunningham and Claire Honore Hollweg, “Cambodia’s Future Jobs: Leveraging Integration for Better Jobs” (Washington, DC: World Bank, n.d.). 163 “Jobs M&E Toolkit” (Washington, DC: World Bank, n.d.), https://www.jobsanddevelopment.org/toolkit/. 81 The promotion of CFEA could have significant positive Some CFEA can also lead to a higher rate of jobs co-benefits by developing the enabling framework for spillover by allowing upstream or downstream the production and marketing of other CFEA. Such co- value additions building on the production or its by- benefits could include improving access to products products. By doing this, it would significantly increase and markets, supporting community organizations (e.g. the job creation potential of this CFEA. As presented in developing cooperatives), generating benefits that can below, if tree plantations can only create a moderate be reinvested, and improving human capital. amount of jobs for a given investment, it can allow the development of a larger amount of jobs if the wood products and their residues are to be processed 7.2. JOB CREATION POTENTIAL locally. Furthermore, most tree plantation companies OF THE DIFFERENT MODELS will outsource many activities upstream, including land preparation, tree harvesting, and transportation, and Potential job creation and the quality and accessibility can enable many others downstream in the processing of the jobs vary, depending on the business model. of the wood products and wood residues. Therefore, Estimates of Full-Time Equivalent (FTE) jobs per business total job creation would be much higher, even if some activity at the scale of a CPA were made based on an of these additional jobs will likely be outside of equivalent of an annual revenue of US$2,100 per year. the community. This analysis shows that forest farming creates more FTEs than growing vegetables in a greenhouse does, Beyond the number of jobs created, the quality of for example (Table 3). While the scale of one CPA was these jobs will also determine the potential of the used for this comparison, the level of investment will CFEA to transition away from non-sustainable illegal vary significantly between the different models, ranging livelihoods. The quality of these jobs will be very from around US$20,000 for a small-scale bamboo specific to the value chain implementation and the processing facility to approximately US$1 million for level of added value that will be made locally. 500 ha of short-rotation tree plantation (Table 2). These figures do not include indirect and induced jobs such as Job creation potential needs to be put into perspective CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S transportation, mechanics, and catering. with current income that can be obtained from NTFP collection. The income that NTFP can generate varies according to the local situation and the level of ecosystem degradation. For example, the average household income from NTFP for members of the Tasal CF in Kampong Speu was US$2,300 (Table 3). 82 Table 2. Job creation potential at the scale of a single CPA Sector Size Employment benefit164 Initial investment (US$) Short-rotation tree plantation 250 – 500 ha 15 – 30 FTE165 US$ 500,000 – US$ 1m Sustainable charcoal production Based on the above 15 – 30 FTE 166 US$ 25,000 – US$ 50,000 plantation size Vegetable greenhouse 750 m2 – 1,500 m2 4 – 6 FTE167 US$ 20,000 – US$ 40,000 Forest farming 10 – 30 ha 15 – 45 FTE168 US$ 30,000 – US$ 75,000 Bamboo incense stick 250 kg – 500 kg per day 10 – 20 FTE 169 US$ 20,000 – US$ 40,000 Table 3. Income from NTFP in Tasal Community Forest before land-use change. Quantity harvested per Item Income per Unit Period Quantity per year (US$) household Mushrooms 2.5 kg per day US$ 3 per kg 3 months $90 Bamboo 35 stems per day US$ 1.25 per culm 3 months $525 Orchids 15 kg per day US$ 2.5 per kg 5 months $163 Rubber 2.5 kg per day Irregular $50 Vegetables US$ 12/h Irregular 6 months $20 Fence 10 /day US$ 2.5 per fence 6 months $1,200 Materials for Housing 1 US$ 8000 30 years $275 Total $2,323 170 Source: UNDP CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S The opportunity costs to households of shifting landless people will tend to rely more on NTFP than livelihood activities should be considered. The more wealthy households will. Even degraded land can sustainability of the harvests in Tasal CF might not have be valuable for grazing or other activities. It is essential been sustainable if the CF had been heavily degraded. to ensure that private-sector investment in CFEA does Still, the income from NTFPs can represent a significant not lead to a net loss of income for marginalized opportunity cost if replaced by other community members. These groups are likely to be livelihood activities. the most dependent on NTFP, and therefore, the most vulnerable to any income loss. Therefore, a special focus The importance of NTFPs is likely to be proportionally should be placed on the job impact of the various CFEA higher for marginalized groups and women. Indeed, on the most vulnerable members of the community. 164 Defined as a daily income of US$ 7 for 300 days per year 165 Estimated based on commercial plantations operations in Cambodia and Laos – land preparation is considered as externalized to contractors. 166 Estimated based on an estimated net profit of 400 Riels per kg of charcoal produced. 167 A greenhouse of 35 m by 10 m would employ approximately 2 people for its operation. 168 Estimated profits based on 800 m2 plot pilot by Caritas Switzerland 169 Estimated by comparing business models of different size 170 “Valuation of Ecosystem Services in the Prek Tnoat Watershed (2nd Draft)” (UNDP: Phnom Penh, 2018). 83 Before a project is undertaken, households and Figure 27. Illegal loggers crossing a pilot Teak plantation in communities must give free, prior, and informed Tasal CPA out of Phnom Aural Wildlife Sanctuary. consent. The figures for Tasal CF (Table 3) illustrate the importance of sound business models that take into account the opportunity costs of households and communities joining a venture. The implications of switching livelihood activities should be examined and understood by participating households and communities in the form of free, prior, and informed consent before projects are undertaken. It is only under this condition that CFEA may support reducing illegal activities (Figure 27). 7.3. RECOMMENDATIONS TO Photo: Nir Atzmon INCREASE LOCAL JOBS INCREASE CAPACITY TO DIVERSIFY CUSTOMER BASE PROMOTE LOCAL PROCESSING FOR HIGHER ADDED VALUE In the longer term, local communities must develop their capacities to provide a broader range of services Economic development in PAs should focus on local to customers. To avoid capacity bottlenecks along job creation. A major differentiation between CFEA in the value chains, it is important to assess which PAs and other development models like ELCs should be responsibilities will remain with the community and on adding value through processing to create local jobs. which will be led by the company. For example, the Enabling policy and fiscal instruments, such as reduced Tatai Leu community producing essential oil (Box or canceled fees for projects with processing developed CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 12) cannot currently implement some value-adding locally, could be implemented. processes, nor manage a platform to receive orders. Being able to access other customers with a processed Local processing can significantly increase job creation and packaged product could significantly increase local and the quality of the jobs. For example, the CamAgra economic development as well as mitigate the impact operation has both a plantation producing pole and of COVID-19, which has caused a major drop in demand industrial wood and a veneer processing factory that by the spa industry. NGO partner FFI is working with the processes the wood into veneer. The factory not only communities to develop packaging at the production adds value to the product but also increases the jobs facility, but significant capacity development will still be created by a third. In the case of a non-mechanized required for managing suppliers and production process, this ratio of extra jobs created can customer relationships. be even higher. For example, charcoal production using residues from a sustainably managed plantation can double the total number of jobs created (Figure 28). 84 Some of the high-end ecotourism sites reported sellers to buyers. Urban sellers represented most of difficulties sourcing safe fruit and vegetables. For the sales at the beginning of the sector’s development. example, the development of greenhouse vegetable Rural sellers now have an increasing share, taking production or organic wild meat production close to advantage of lower labor and real estate costs and, in ecotourism sites could add value for local producers. some cases, proximity to production capacities. This will still require some significant increases in the level of professionalism and organization for farmers The “Taobao villages” are developed in clusters, and their cooperatives in order to reliably meet generally focused on the production of similar customer orders. goods. This strategy provides significant benefits with a specialized workforce, availability of a dedicated Ideally, partnerships should be non-exclusive to supply chain, networks of support services, and quick allow CPAs to sell to other actors and to develop their dissemination of innovation. This cluster model can activities. Having a private-sector partner to help build make rural communities highly competitive on the capacity may mean the producer has an exclusive e-commerce platform. This form of local economic agreement, such as the Ibis Rice model (Box 5). Allowing growth has also led to an increase in local tax collection, a community to sell to other actors may increase supporting the improvement of public infrastructure community resilience by reducing its exposure to drops and services. in demand, such as the one currently seen in the spa industry as well as those in some ecotourism sites due A co-benefit of e-commerce in rural areas represents to COVID-19. a new job opportunity for the young generation. The development of e-commerce platforms creates jobs in Improving the reliability and consistent quality offered website design, the creation of promotional materials, to clients will require significant capacity building. customer service relations, logistics, packaging, and Still, being able to provide a broader range of services professional services. These jobs can now be done across the value chain, combined with capacity building, remotely, meaning the younger generation does not has tremendous potential to increase the potential have to move to cities to find quality jobs, and can CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S of job creation and to support the development of an instead stay in rural areas and contribute to the local entrepreneurial ecosystem locally. economy and support their families. DEVELOP E-COMMERCE TO INCREASE The level of education, especially high-school ACCESS TO MARKETS education, was a major factor in the development of a rural e-commerce economy. In the development of China offers some compelling examples of how e-commerce in China, young people graduating from e-commerce can power economic development in high school were more likely to go to college. However, remote rural areas. The e-commerce market in China they often came back to the community, due to the has been growing at an incredible rate, and this market high unemployment rate in urban areas, bringing with is now bigger than such markets in France, Germany, them laptops and skills on how to start e-commerce Japan, the United Kingdom, and the United States, businesses.172 Given that many are immigrating back to combined. The central platform is Taobao, a subsidiary 171 villages as a result of COVID-19, an opportunity might of Alibaba Group, which, like eBay or AliExpress, links exist to utilize returnees in these roles. 171 “Digital China: Powering the Economy to Global Competitiveness | McKinsey,” accessed July 14, 2020, https://www.mckinsey.com/featured- insights/china/digital-china-powering-the-economy-to-global-competitiveness. 172 Jiaqi Qi, Xiaoyong Zheng, and Hongdong Guo, “The Formation of Taobao Villages in China,” China Economic Review 53 (February 1, 2019): 106–27, https://doi.org/10.1016/j.chieco.2018.08.010. 85 Figure 28. Comparing the number of jobs created from a medium-scale plantation (baseline) with added-value from other activities potentially associated with the plantation. 80 70 60 30 50 40 5 5 30 5 5 5 20 30 30 30 30 10 0 Baseline Baseline + Rice Baseline + Rice + Baseline + Rice + Shade Shade crops crops + Charcoal Short rotation tree plantation with shade tolerant crops with initial rice farming agroforestry with processing of residues into charcoal Cambodia has several of the building blocks of an An e-commerce model could apply in PAs for a wide e-commerce platform in place. It has a young population, range of specialized added-value products. Products very high rates of penetration for mobile phones and from PAs, such as essential oil, handicrafts, NTFPs, and internet, and has many social media users. 173 Mobile premium agriculture products (see Chapter 4) could money systems have also expanded very rapidly in find markets via e-commerce and could contribute to recent years. In addition, the purchase of goods directly sustainable economic development in these remote off social-media platforms is now common practice for areas while creating attractive jobs for the young a growing proportion of the population. These factors generation. CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S give Cambodia great potential for the replication of the “Taobao” e-commerce model. 173 Mobile penetration rate of over 100%, internet penetration of 58%, 71% of population active social media users. As a percentage of the total population. 2021 figured from: https://datareportal.com/reports/digital-2021-cambodia 86 08 ENVIRONMENT FOR RECOMMENDATIONS ECONOMIC ACTIVITIES FOR DEVELOPING VALUE CONSERVATION-FRIENDLY CHAINS AND AN ENABLING CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 87 The recommendations and strategic actions detailed in for ecotourism and CFEA development be improved this section of the report are discussed in more detail (Box 5). Several value chains have the potential to in other sections. See those for further context. The bring conversation-friendly economic development to recommendations have been organized into two parts, the CML. These value chains are detailed briefly in the based on developing value chains for Conservation- following section. friendly economic activities and an enabling environment for conservation-friendly Develop value chains for Plantation Forestry (Section economic development. 4.1). It is recommended that the project replicate the benefit-sharing mechanism developed by a Cambodian teak company for similar forms of private-sector 8.1. DEVELOPING VALUE partnerships. Outgrower schemes (also referred to as CHAINS FOR CONSERVATION- contract farming) are seen as offering the potential FRIENDLY ECONOMIC to improve livelihoods and should be promoted in ACTIVITIES collaboration with short-rotation timber plantations. These plantations should be developed only in highly degraded parts of PAs using smallholder planting, Recommendations for developing value chains for particularly in areas where agriculture is uneconomic. CFEA. A detailed list of recommendations for developing To ensure that only highly degraded areas are used, value chains generated by the analysis presented in this and this approach does not have the perverse incentive report is listed in Table 4. These include guidance on of promoting degradation of high-conservation value the planning framework needed for specific groups of areas, more detailed mapping of the CML should be value chains. undertaken to identify suitably degraded areas. It is also recommended that plantations be mixed-species, A proper planning framework is required before CFEA or a mosaic of single-species stands with strong soil can be implemented successfully in PAs and CPAs. organic matter management practices, to avoid the The building blocks of this framework are detailed in vulnerabilities that plantation monocultures have to CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S Section 6 of this report. These include mechanisms climate change (Box 5). for establishing multi-stakeholder dialogue and for developing a Theory of Change for conservation-friendly Develop value chains for intercropping forestry with economic development in PAs and CPAs. Extensive agricultural crops (Section 4.2). Short-rotation tree mapping of the CML is proposed to identify priority plantations with intercropping provide benefits to both areas for different value chains. In these areas, it is companies and local communities, and they should be then recommended that land-use plans be developed promoted in the CML. The main barrier to the expansion and guidelines created to determine what CFEA should of such intercropping is the security of the market of the be allowed at what levels of degradation. FPIC by an second crop, so technical support must be provided to independent third-party and transparent procedures for address this issue. private-sector engagement are recommended to ensure fair and equitable outcomes for local people. Criteria Promote the switch to sustainable charcoal using are proposed to assess private-sector investment in PAs, plantation residues (Section 4.3). The plantations with capacity building recommended for CPAs to ensure recommended to be established in degraded CPAs could they can meaningfully participate in CFEA. Finally, it is make timber residues available for the sustainable recommended that synergies between infrastructure production of charcoal. 88 Table 4. Recommendations for developing value chains for Conservation-friendly economic activities. The recommendations and strategic actions listed in this table relate to Section 4 in the main body of the report. Please see this section for further details. Recommendation Strategic Action Responsibility Replicate the benefit-sharing mechanism developed by the Cambodia Teak MoE company for similar forms of private-sector partnerships Promote outgrowers schemes (also referred to as contract farming) in MoE Develop value collaboration with short-rotation timber plantations chains for Plantation Forestry (Section 4.1) Undertake more detailed mapping of the CML to identify degraded areas for a MoE network of CPAs for plantations with outgrowers Promote mixed-species/small single-species plantations to avoid the MoE vulnerabilities that monocultures have to climate change Encourage short-rotation tree plantations with intercropping for their benefits to MoE Develop value both companies and local communities chains for intercropping Provide technical support to address market security of the second crop (the main MoE, MAFF forestry with barrier to the expansion of intercropping) agricultural crops Trial models of agroforestry collaboration with the private sector and CPA MoE (Section 4.2) members Promote the switch Promote the processing of timber residues for sustainable charcoal production, MoE to sustainable particularly in the Phnom Aural Wildlife Sanctuary charcoal using Increase law enforcement around informal charcoal production to produce a level MoE, MAFF plantation residues playing field for sustainable charcoal manufacturers (Section 4.3) Streamline the process of obtaining CITES permits between MoE and MAFF be MoE, MAFF Develop value chain undertaken to promote the development of this sector for agarwood (Section 4.4) Pilot and promote agarwood production integrated with other added-value crops MoE in a forest farming model CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S Expand multi-stakeholder collaboration (e.g. Ibis Rice model) to the export of MoE permanent crops to international markets Promote outgrower farming for GAP or organic vegetables around medium-scale MoE, MAFF Develop value farms, especially near ecotourism sites chains for agroforestry with Support cooperatives development to partner with the private sector to access MoE, MAFF conservation- organic and high-quality GAP vegetable markets. friendly agriculture Invest in technical assistance and infrastructure such as greenhouses and cold MoE (Section 4.5) storage for high-quality production Explore incentive mechanisms for farmers to maintain some biodiversity in MoE, MEF, MoC plantations of permanent crops. Livestock interventions should focus on integration into the landscape through MoE, MAFF silvo-pastoralism Develop value Forest farming of high-value livestock should be promoted to add value for MoE chains for livestock farmers and improve ecotourism experiences and chicken farming Wildlife farming should only be considered under strict conditions that promote MoE (Section 4.6) conservation Chicken farming should be promoted to increase nutritional and economic well- MoE, MAFF being and offset illegal hunting 89 Recommendation Strategic Action Responsibility Scale-up wild honey production in the CML – particularly in areas with ecotourism MoE – using existing models for honey production Develop value chains for non- Promote rafter beekeeping in degraded areas along with ecosystem restoration MoE timber forest Pilot and promote forest farming of high-value cash crops with valuable tree MoE products (Section plantations in already degraded areas in the CML 4.7) Support the expansion of the existing lemongrass essential-oil production unit to MoE increase production and add value This would be particularly appropriate in the Phnom centers. Accessing these premium markets will require Aural Wildlife Sanctuary, where most informal charcoal farmers to be organized into cooperatives to partner is made. Furthermore, vacant, degraded, marginal, with the private sector. The provision of infrastructure or under-utilized land in CPAs could be developed such as greenhouses and storage facilities will help to to produce both charcoal and higher-added-value increase the competitiveness of cooperatives. Given products. For these approaches to be viable, law the importance of access to markets, the selection enforcement around informal charcoal production of ecotourism sites for increased access should also must be strengthened to decrease unregulated logging. consider potential synergies to distribute high-quality Also, the highly complex procedures to operate formal GAP and organic vegetables. Permanent crops, like charcoal production must be eased (i.e. wood harvesting banana, mango, and durian have been significant and kiln establishment permits, transportation and drivers of land-use change, so developing incentive storage licenses, etc.) mechanisms to encourage farmers to maintain some biodiversity in plantations of permanent crops is Develop value chain for agarwood (Section 4.4). recommended. For example, expanding the Ibis Rice To develop value chains for protected species like model to other crops and commodities, or the use of agarwood, the process for obtaining CITES permits must tax credits, direct PES, or grants for maintaining native be streamlined between the MoE and the MAFF. If this tree cover could be promoted (Box 5). CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S occurs, and agarwood production can be increased, it should be integrated with other added-value crops Develop value chains for silvo-pastoral systems in a forest farming model (Box 4). Being a long-term and chicken farming linked to ecotourism activities investment, public and private sector support will be (Section 4.6). Livestock interventions are a mainstay necessary to develop the sector in a conservation- of development, and their promotion in conservation- friendly way. friendly development should focus on integration into the landscape through silvo-pastoralism. Another Develop value chains for agroforestry and approach that could be promoted to add value for conservation-friendly agriculture (Section 4.5). The farmers and to improve ecotourism experiences is recommended approach for agroforestry is a multi- the forest farming of high-value livestock. That said, stakeholder collaboration, much like the one developed wildlife farming should only be considered under the for Ibis Rice, to add value to the export of permanent strict condition that it promotes conservation and crops to international markets. For the domestic reduces the risk of zoonosis. Most wildlife farming has market, high-quality GAP and organic vegetables are in been shown to be detrimental to conservation efforts. demand, and a hybrid outgrower farming model around Chicken farming should be encouraged to increase the medium-scale farms should be promoted. This is nutritional and economic well-being of local people especially beneficial in sites that are in close proximity and to offset the widespread illegal hunting in PAs in to ecotourism sites or have good access to urban the CML (Box 9). 90 Develop value chains for NTFPs (Section 4.7). Several 8.2. AN ENABLING NTFPs have the potential to improve livelihoods in the ENVIRONMENT FOR CML with minimal impact on biodiversity. Support to CONSERVATION-FRIENDLY wild honey value chains should be scaled up in the CML using models already developed in Cambodia and the ECONOMIC DEVELOPMENT CML. Given that tourists constitute a significant market for wild honey, this scaling should focus mainly on A detailed list of recommendations for an enabling areas with ecotourism or reasonable access to those environment generated by the analysis and presented in markets. Further added value could be achieved for wild this report is listed in Table 5. These recommendations honey production and beekeeping businesses through include guidance on regulatory and fiscal frameworks, organized tours for ecotourists as part of an integrated improving land tenure security, building the skills and business model. financial resources of CPA members, and creating local employment opportunities. Conversely, the farming of bamboo and rattan appears to have low profitability as a village enterprise under The current regulatory framework is far from enabling current market conditions in the landscape. The forest the development of CFEA. Until such an enabling farming approach (i.e. managing forests to increase regulatory framework is implemented, the logical choice yields of NTFPs) should also not be applied in areas for households and the private sector will remain the of high conservation value. In already degraded areas more destructive forms of economic development that in the CML, forest farming of high-value cash crops, currently dominate the CML. such as cardamom, could be combined with ecosystem restoration using a variety of useful tree plantations. CPA regulations tend to pursue conservation objectives Given Cambodia’s reputation for high-quality cardamom, instead of a balance of socio-economic development conservation-friendly cardamom could be cultivated in and environmental benefits. The rules regarding CPAs the understory of degraded forests and marketed using have been restrictive compared to the rights given to the distinct Cambodian ‘brand’. Other crops, including large-scale investors under ELCs that occur in the same CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S turmeric, ginger, and galangal, could also be promoted Sustainable Use Zones. Currently, the ability of CPA for forest farming in association with high-value useful Management Committees to engage in partnerships tree species. Because lemongrass essential oil is a niche with the private sector is very restricted, as is their product, the focus should be to expand the production opportunity to pursue CFEA. of the current facility to increase value creation production rather than replicate the model. Private companies investing in CFEA will face greater issues than conventional businesses. To attract private sector investment in CFEA, given the challenges detailed in previous sections, the RGC should extend the fiscal incentives granted to Qualified Investment Projects to smaller investments into CFEA in PAs. 91 The regulatory challenges faced by CPA Management An enabling financial framework for CFEA could further Committees are a major constraint on their support private sector partnership agreements in involvement in CFEA. Numerous studies have reported CPAs (Section 5.2). Investors complying with regulations these constraints, and they are widely recognized as in PAs to promote sustainable production face unequal major reasons preventing communities from developing competition from actors operating in the informal profitable commercial activities based on Sustainable market and do not follow sustainable production Forest Management. 174 principles. A combination of increased law enforcement targeting illegal businesses and granting incentives (tax An amendment of the PA Law is necessary to create the exemptions or other measures) for qualified sustainable enabling regulatory framework for CFEA and private- businesses could be considered. To encourage more sector partnership agreements in CPAs (Section 5.1). investment and to level the playing field, similar The Protected Areas Law (PA Law) should be amended incentives as the one granted to large-scale tree to grant independent legal existences to CPAs, similar plantations should be granted to CPAs and CFs with the to those of businesses. It should allow the opportunity exemption of harvesting, processing, and transportation and the right to contract with the private sector in fees for timber and NTFP. Because businesses rank unfair order to engage in CFEA business activities if in line competition with the informal sector as their biggest with forest management plans. It should also allow CPA barrier, fiscal incentives to formal and sustainable CFEA management agreements to last from 30 to 50 years in PAs should be granted to support competition against and have tenure rights with strengths similar to those the informal sector. Incentives could also be paid to the of long-term leases. A revision of the PA Law should also informal sector in PAs to assist them in transitioning to clarify the type of CFEA activities that are eligible, orient formal and sustainable CFEA. Furthermore, MEF could the preparation of management plans and provide a extend the exemptions for qualified investments from legal basis for MoE to issue necessary authorization for not only large-scale investments but also to smaller- the production, transport, storage, and sales/exports of scale partnerships with the private sector in CPAs. sustainable products from CFEA. Improve land tenure security for CFEA development CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S The necessary amendment of the PA Law could be in CPAs (Section 5.3). Confusion around land tenure supported by various guidelines to support the is the major source of conflict in PAs. Land tenure for development of CFEA. Guidelines should be developed individuals with ongoing activities inside CPAs should for private-sector partnerships and contractual be clarified while ensuring no adverse impacts on agreements to ensure these are fair and equitable customary rights and a better understanding of impacts relationships and promote sustainable production. in conservation goals of CPAs. Completing the CPA Consultation procedures for free, prior, and informed process should be undertaken as a matter of priority, consent should be established for private sector with Prakas for CPAs, management plans, zoning, and investments in PAs and CPAs. Given the risks inherent demarcation completed as soon as possible for CPAs in development inside PAs, criteria to assess private- where CFEA will be developed. To ensure progress is not sector investment propositions in CPAs should be lost due to land grabbing and other illegal activities, law also developed. enforcement in CPAs should be strengthened. To further empower communities, a Prakas could be developed to allow for collaborative management of Community Zones and Sustainable Use Zones. 174 James Bampton, Thomas Enters, and Ratana Pen, “Study on Effective Sustainable Forest Financing Mechanisms in Cambodia” (Phnom Penh, Cambodia: Partnership Program for Forestry and Fisheries in Cambodia (PaFF), 2021). 92 Build skills and financial resources of CPA members actively promote private community partnerships, (Section 5.4). If communities are to benefit from act as “honest brokers” between private entities and conservation-friendly development, they need the communities, and promote the interests of the public skills to engage fully. A training needs assessment and development partners (DPs). for CPAs, including skills required for engagement in CFEA, should be undertaken, followed by investment Create local employment opportunities (Section in longer-term coaching to support CPA Management 7.3). To maximize benefits to CPA communities, local Committees. Beyond skills, to increase returns for processing that can significantly increase job creation communities, grants and a loan facility should be and job quality should be promoted. Furthermore, CPA established for investment in equipment to add communities should be encouraged to increase their value through processing. MoE and PDoEs should capacities to provide better products and services also further strengthen their technical capacity to to customers. Table 5. Recommendations on an enabling environment for conservation-friendly economic development. The recommendations and strategic actions listed in this table relate primarily to Section 8 of the main report: Barriers to enabling conservation-friendly economic development. Please see the relevant section for further details. Recommendation Strategic Action Timeline Responsibility* Develop guidelines for private-sector partnerships and contractual Short MoE agreements Develop consultation procedures for free, prior, and informed Short MoE consent for private-sector investments in PAs and CPAs Develop an Develop criteria to assess private-sector investment propositions Short MoE enabling regulatory in CPA framework for CFEA and private- Amend PA Law to allow CPA committees to develop CFEA in CPAs Medium MoE sector partnership and partner with the private sector with appropriate safeguards agreements in CPAs CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S Amend PA Law to allow for collaborative management of CPAs Medium MoE (Section 5.1) Amend PA Law to increase CPA Management Plans to at least 30 Medium MoE years Streamline regulations and permit timber and NTFPs for production, Medium MoE, MAFF, MoC transport, and sales/exports Provide CFEA in CPA with the same fees exemptions as the large- Medium MoE, MAFF scale plantations Develop an enabling fiscal framework for Grant fiscal incentives to formal and sustainable CFEA in PAs to Medium MoE, MAFF CFEA and private- support competition against informal sector sector partnership Grant fiscal incentives to the informal sector in PAs to transition to Medium MoE, MAFF agreements in CPAs sustainable CFEA (Section 5.2) Extend exemptions for qualified investments to smaller-scale Medium MoE, MAFF partnerships with the private sector in CPAs Clarify land tenure for individuals inside CPA, while ensuring no Short MoE, MLMUPC Improve land tenure adverse impacts on customary rights and conservation. security for CFEA Complete CPA process as a matter of priority: Prakas for CPA, Short MoE development in management plans, zoning, and demarcation CPAs (Section 5.3) Strengthen law enforcement in CPA to reduce risks of land grabbing Long MoE, PDoEs 93 Recommendation Strategic Action Timeline Responsibility* Conduct a training needs assessment for CPAs, including skills Short MoE & DPs needed for engagement in CFEA Build skills and financial resources Invest in skills training and longer-term coaching to support CPA Long MoE & DPs of CPA members Management Committees (Section 5.4) Support CPA Management Committee with grants and loan facility Long MoE & DPs to invest in CFEA value-addition processing equipment Establish a multi-stakeholder platform to support dialogue and a Short MoE, MAFF shared vision for CFEA in PAs Develop a Theory of Change at the landscape level for Short MoE, MAFF conservation-friendly economic development in PAs and CPAs Map the CML to identify priority CPAs for different value chains Short MoE Develop guidelines to identify the levels of degradation in a CPA Short MoE that allows different types of CFEA Planning for conservation- Develop transparent procedures for private sector engagement with Short MoE friendly economic MoE and CPA committees, incl. guidelines for benefit-sharing development Develop land-use plans for all CPAs, Community Zones and Medium MoE (Section 6) Sustainable Use Zones where CFEA are to be implemented Obtain free, prior, and informed consent using an independent third Medium MoE party for all private sector investments Assess private-sector investment in CPAs according to set criteria Medium MoE that look at multiple benefits Undertake capacity building with local communities so they can Medium MoE meaningfully participate in CFEA in CPAs Promote local processing that can significantly increase job creation Medium MoE and the quality of the jobs Create local employment Increase capacity to provide better products and services to Medium MoE opportunities CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S customers (Section 7.3) Develop an e-commerce platform to increase access to markets for Medium MoE products from CFPB in CPAs * MoE - Min. of Environment, MLMUPC - Min. of Land Management Urban Planning and Construction, MAFF - Min. of Agriculture, Forestry and Fisheries, MRD - Min. of Rural Development, DP - Development partners, PDoEs – Provincial Departments of Environment. 94 BIBLIOGRAPHY Antonopoulou, Marina, James Compton, Lisa S. 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Annual forest cover change in the CML Protected Areas between 2001-2019. 14,000 12.8k 12,000 11.1k 11.2k Annual Forest Cover Change in ha CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 10.3k 10.3k 10,000 9.3k 8.6k 8,000 7.2k 6.8k 6,000 5.2k 4,000 3.6k 3.6k 3.1k 2.6k 2.1k 2.4k 2,000 1.4k 1.3k 1.3k - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Forest Cover Change in ha 3 per. Mov. Avg (Forest Cover Change in ha) Data: Analysis using Hansen et al. Global Maps of 21st Century Forest Cover Change175 175 M. C. Hansen et al., “High-Resolution Global Maps of 21st-Century Forest Cover Change,” Science 342, no. 6160 (November 15, 2013): 850–53, https://doi.org/10.1126/science.1244693. 103 Figure C. Population and density in each Protected Area of the Cardamom Mountains 25,000 30 24.20 25 20,000 Population density Total population 20 15,000 15 10,000 9.38 10 5,000 5.96 4.67 5 1.77 2.69 0.46 - - 1 2 3 4 5 6 7 Total population Population density APPENDIX 2 — TYPOLOGY OF NON-WOOD FOREST PRODUCTS BY FAO CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S From G. F. Muir et al., “Into the Wild: Disentangling Non-Wood Terms and Definitions for Improved Forest Statistics,” International Forestry Review 22, no. 1 (April 2020): 101–19, https://doi.org/10.1505/146554820828671553. 104 APPENDIX 3 — PRINCIPLES FOR FREE, With regard to economic development projects, all plans PRIOR, AND INFORMED CONSENT and proposals that provide details about the timeline, scale, location, mitigation plans and other important FREE — There is no coercion, intimidation, or information, such as that provided by Environmental manipulation. A fundamental principle of contract law Impact Assessments (EIAs), must be shared with the is that each party must give free and genuine consent potentially impacted indigenous community long to be bound, without undue influence, being coerced, before any decision is made to approve or not approve intimidated, or manipulated. the project. PRIOR — Consent must be sought sufficiently in advance CONSENT — Process of which consultation and of any authorization or commencement of activities. participation represent the central elements. There must be enough time for a genuine and robust consultation process to take place according to their It requires the state, companies or local authorities to own decision-making procedures. negotiate in good faith with legitimate representatives of indigenous peoples, to obtain their uncoerced prior For the granting or withholding of consent to be informed consent regarding any use of their lands meaningful, it must be decided before formal decisions or resources, and to provide redress for any adverse are made (such as by the government) about whether to impact on indigenous peoples as a consequence of allow the proposed development to go ahead. such development. INFORMED — Indigenous peoples should receive Source: Mekong Region Land Governance. satisfactory and comprehensive information in relation to the project, including a preliminary assessment of its economic, social, cultural, and environmental impact. Crucially, this information should be accessible to the people concerned, and accurate. CO N S E R VAT I O N - F R I E N D LY ECO N O M I C D E V E LO PM E N T I N C A M B O D I A’ S P R OT ECT E D A R E A S 105