Lao PDR has one of the highest levels of forest cover in Southeast Asia and has experienced steady growth in coverage in recent decades. An estimated 80% of the population are heavily reliant on forests for their well-being. The forests store carbon, help protect communities and infrastructure from the impacts of drought and flash floods, supply clean water and food, provide livelihoods and materials used in construction and trade, and ensure a healthy flow of the Mekong River.
Forests cover a substantial part of the Mekong Basin in Laos, and the forests of the Greater Mekong are some of the most biologically diverse places on Earth. However, native forests are becoming increasingly fragmented. As a result, wildlife can no longer move from one part of the forest to another, and their populations are separated. Sufficiently large breeding populations cannot be maintained, and the danger of extinctions increases. Forest fragmentation also makes it easier for poachers and non-native species to enter, increases the chances of fires, and leads to the accelerating rate of deforestation and loss of biodiversity.
Forest covered more than 70% of Lao PDR’s land area in the 1940s. Unfortunately, by 2010, forest cover had dropped to 40%. Forest loss was due to infrastructure development, such as hydropower, mining, and roads, and conversion of forests to agricultural land attributable to population increase and expansion of commercial crop production.
Illegal logging, which continues in all protected areas and agricultural expansion are likely to continue to drive high rates of deforestation. In 2014, and estimated 191,031 hectares of forest was lost, according to Global Forest Watch, up from the 80,543 hectares lost in 2008. Although, forest loss has been greatly curtailed since the introduction of PM Decree No. 15 which banned unprocessed timber exports, illegal logging still exists and occurs at low intensities at all sites.
An EU study that addressed forest exploitation in Laos (Grace et al., 2012) revealed that the areas mapped on the national level as protection forest were often used for agricultural production, and even included major town areas. In one case, an entire district was mapped as protection and production forests, but actually contained the district’s capital, large lowland agricultural areas, and a coal mining concession. Thus, information can be lacking, of low quality, or unreliable regarding deforestation of different forest categories.
In Lao PDR, deforestation is caused by many drivers. In particular, illegal logging, unsustainable timber extraction from commercial logging activities, agricultural expansion, industrial tree plantation development, hydropower development, mining, and other infrastructure development. Pioneering shifting cultivation also contributes depending on the scale of its application, with a lesser impact if carried out on a smaller scale (patches of less than 1 ha). Natural forest fires may also contribute, but in both cases, regrowth of swidden and burnt forest areas can be surprisingly rapid. Wood harvesting by rural households for domestic consumption most likely has a much less significant impact.
Key policies and governance approach
Laos PDR's efforts to address illegal logging and manage its forests sustainably include the ‘Forestry Strategy’ and the ‘National Green Growth Strategy 2019-2030’. In 2019, the National Assembly approved the new Land Law and Forest Law.
The Forest Law is the main law addressing forestry issues in Lao PDR. It lays out measures and regulations for the sustainable management, conservation, development, use and inspection of forest resources and forest land. The new Forest Law promotes ‘village forest management’ over much of the forestry estate. This decentralization of management responsibility effectively places forests designated for village use under the management of those directly dependent upon the forests for their livelihoods. The new law also provides the legal basis for promoting commercial tree plantations, which was reinforced by a subsequent Prime Minister’s Decree No. 247 enacted August 20, 2019. Through this policy, the Government aims to promote tree planting and non-timber forest products (NTFPs) by individuals, households, legal entities, and organizations.
In addition, Prime Minister’s Order (PMO) 15 enacted on May 13, 2016, has strengthened the strict management and inspection of timber harvesting across the country. This had an immediate nationwide impact on halting the flow of illegal timber across Lao PDR’s porous international borders. It has also been regarded by many stakeholders as positive and in line with ongoing international agreements, namely the EU Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan, and the UN Programme on Reducing Emissions from Deforestation and Forest Degradation (REDD+).
With regards to FLEGT, Lao PDR is pursuing its negotiation with the European Union (EU) on a Voluntary Partnership Agreement (VPA), a process initiated in 2012, to promote trade in legal timber products and improve forest governance. The Prime Minister approved formal negotiations in 2015 and the first negotiation session was held in April 2017. Based on experiences in other countries, this negotiation process is expected to take several years.
SUCCESSES AND REMAINING CHALLENGES
Governance is a sensitive topic in the country, adding to the challenges facing the forest sector. However, the government is working to improve forest governance, as outlined in the Forest Strategy 2020 and the 2019 Forest Law. A participatory forest governance assessment was carried out in late 2017 and early 2018. The participants in the research, including from government, civil society, and local communities felt that the policies and legislation in place provided a strong foundation; however, systematic issues in the implementation, enforcement and compliance undermined the state of the forests in the country.
Stakeholders strongly stressed that the process of turning laws and policies into effective plans is still problematic, in particular due to a lack of resources and capacities, including for facilitating multi-stakeholder processes at local levels. There is a sense of lack of clear delegation between the national, provincial and district levels of authority. This hampers an appropriate and transparent planning process, with decision making still limited to a few main government institutions. In addition, access to good information about forest boundaries, land and forest product licensing is limited, participants said, undermining efforts to increase transparency and accountability.
The rapidly changing forest sector policy and strategy environment in Lao PDR requires new and strengthened management capacities and skills. The forestry sector faces large capacity gaps in terms of human resources, their qualifications and skills, budgets, equipment, and transport for managing and protecting the vast forestry estate as envisioned. One of the long-standing factors contributing to the lack of skills is high staff turnover.
In addition, law enforcement in Lao PDR is challenging, especially in remote areas where lack of alternative livelihood opportunities and strong demand for agricultural and wildlife products are driving encroachment and illegal hunting and where enforcement involves coordination among several agencies across jurisdictions (national, provincial, district). While multiagency training has become standard practice and joint operations at provincial and national levels are carried out regularly, the multitude of agencies involved poses problems for coordination and there is confusion as to the delineation of mandates and responsibilities of various agencies. Additionally, the absence of a reporting line from the provincial to the central level creates a conflict of interest.
Initiatives and Development Plans
In January 2021, Lao PDR and the World Bank’s Forest Carbon Partnership Facility (FCPF) signed an agreement to provide up to $42 million between 2021 and 2025 to support the country’s efforts to reduce emissions from deforestation and forest degradation (REDD+). Under this Emission Reductions Payment Agreement (ERPA), the World Bank commits to making payments to the Lao PDR for verified reductions of up to 8.4 million tonnes of carbon dioxide emissions in northern Laos. The program aims to address the drivers and underlying causes of forest loss in six provinces (Houaphanh, Luang Prabang, Oudomxay, Luang Namtha, Bokeo, Xayabouly), encompassing a third of national territory. The region has been responsible for 40 percent of nationwide deforestation and forest degradation between 2005–15.
Goals and Ambitions
The Forestry Strategy set the goal of restoring forest cover to 70% by 2020. However, Laos only achieved forest cover of 62% by 2020. The Government has reset the goal of 70% by 2025 as described in the 9th NSEDP (2020-2025). The 9th NSEDP also aims to upgrade 5 National Protected Areas to national parks in 2025, and increase the forest recovery area by 1.8 million ha.
Opportunities highlighted in World Bank’s Lao PDR Forest Note:
- Further invest in capacity building, with emphasis on establishing a well-functioning authorizing environment for public-private partnerships (PPPs) and utilizing law enforcement technologies.
- Establish a Landscape Investment Platform to support multisector dialogue and decision-making to balance trade-offs of land uses and secure mutual opportunities among sector projects.
- Revise the implementing regulations related to the Forestry Law to enhance clarity and consistency and to eliminate inconsistencies and gaps in the legal framework.
- Review options to streamline the institutional framework for forest law enforcement.
- Decide on the continuity of the logging ban to consequently adjust (or not) management objectives of the Production Forest Area (PFAs).
- Consider allowing private investment in PFAs.
- Consider the formation of a Department of National Parks and Wildlife Conservation in Ministry of Agriculture and Forestry.
- Plan for rural roads and infrastructure with a landscape perspective to minimize risks to biodiversity and forests.
- Scale up nature-based solutions for disaster resilience.
- Scale up livelihood development around forest areas through intensification, nature-based infrastructure, and cross-sectoral collaboration.
- Develop policies and incentives to promote sustainable wood fuels, increase efficiencies of kilns and cookstoves, and promote alternative energy sources.
- Increase public financing for monitoring and law enforcement, extension, and activities that have potential to leverage financing from the private sector.
- Seize untapped opportunities to benefit from PES (Payment for Environmental Services) schemes for hydropower and other sectors.
- Seize untapped opportunities to benefit from REDD+ and other climate finance options.
 World Bank. 2020. Lao Biodiversity : A Priority for Resilient Green Growth. World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank.org/handle/10986/34131 License: CC BY 3.0
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