Forests get a new price tag

The Ministry of Environment and Forest and Climate Change (MoEFCC) has on August 1, 2017, revised the guidelines to implement the Compensatory Afforestation Fund Act 2016. The guidelines add new categories of costs that the project proponent is required to pay.

Each time forest land is diverted for non-forest purposes whether it is for mining or industry, the user agency that needs the diverted land is expected to afforest an equivalent area of forests somewhere else. Moreover, because the plantation so created cannot possibly provide the ecological services anytime soon, which natural forest that were cut down were providing, the act mandates that the user agency compensate the loss. The user agency diverting land does so by paying the net present value (NPV) of the forests for the next 50 years.

Revised MoEF guideline boosts the cost of forest diversion

Put simply, NPV is the monetised value of the forests under the jurisdiction of Forest Conservation Act (1980) that is diverted for projects for non-forest use. This is paid as compensation for the ecosystem services provided by the forests. The ecosystem services could be both tangible and intangible and include a wide array of services like timber, medicinal herbs, non-timber forest products, wildlife habitats, water purification and recharge, carbon sequestration and much more.

NPV calculations are done by a panel of experts and take into consideration the class and type of forests; there are six eco-classes and three canopy cover density classes. NPV of a hectare of forestland could range anywhere between Rs 5.8 and 9.2 lakh as per a 2002 SC order. The Supreme Court also clarified in 2002 that the NPV was to be paid in addition to payments for compensatory afforestation, additional compensatory afforestation, penal afforestation and catchment area treatment plan funds. “This figure has been criticised because the country’s forestland has never been evaluated vis a vis the intangible benefits of forests in various bio-geographic regions, ” as per a report in Down To Earth.

The fund so pooled is managed by a central body known as the Compensatory Afforestation Management and Planning Authority (CAMPA), which is supposed to use it for afforestation and reforestation. CAMPA was constituted by a direction of the Supreme Court in 2002. Later in 2005, the Supreme Court set up an expert committee headed by Kanchan Chopra, then Director of the Institute of Economic Growth, Delhi to identify the parameters to properly evaluate forests and identify projects eligible for exemption from NPV payment. The committee recommended a management system for NPV. It suggested a three-tier system of central, state and local bodies to ensure proper distribution of funds. The committee also stated that a “price cannot be put on the inviolable nature of protected areas and the bio-diversity-rich areas like sacred groves and mangroves… protected areas should not be diverted for any non-forestry use at any cost.”

Questions continued to be raised about the need to use the funds judiciously. Over a decade later, in 2016, the Compensatory Afforestation Fund Act was passed by the parliament and the release of more than Rs 42,000 crore approved for spending on afforestation and wildlife protection projects. This was the money that had accumulated as compensation against ongoing forest diversion.

The new guidelines under this act have not yet been made public but have been submitted to the National Green Tribunal. Reports indicate that it talks about newly added costs, which is expected to make the process costly. More specifically, it asks for adding 30 per cent of the NPV of forests to the cost of diversion for “possession of forest land”, and 50 per cent of NPV cost as “habitat fragmentation cost”. Another 10 per cent of the forest’s net value is added as compensation for loss of animal husbandry productivity and soil moisture conservation costs.

The guideline will come into effect only after the NPV of forests is revised. The NPV has not been revised by the MoEF, which is supposed to do so every three years. This in spite of several court orders directing it to revise NPV.

More recently in 2014, the Indian Institute of Forest Management was involved in an official exercise on reassessing the value of forests. Its report states that the NPV was grossly underestimated and proposed NPV rate ranges from Rs 9.87 lakh to Rs 55.55 lakh per hectare.

In 2016, the MoEF came up with draft rules to implement the Compensatory Afforestation Fund Act 2016. Civil society organisations claim that this was done in a non-consultative manner. A major concern was that the Compensatory Afforestation Fund Act does not recognize the Forest Right Act, which vests rights of forest management to tribal and forest dwelling people. In fact, it clashes with Forest Right Act. Not only that, it does not provide for consent of gram sabha that goes against the principles of democratic devolution, laid down in the 73rd and 74th constitutional amendments.

As per a report in Wire, “the CAMPA proposes to establish central and state authorities to spend forest diversion compensation funds, with little democratisation or accountability. This will have ominous consequences for the hard-won rights of forest-dwelling and tribal citizens.” Several reports suggest that while individuals or communities have applied for titles, under the Forest Rights Act, foresters have diverted the lands for compensatory afforestation projects.

So, through all these years the MoEF has not been able to utilise the CAMPA funds properly. This has been noted by the CAG whose 2013 report which found out that only 61% of the fund released by the ad-hoc CAMPA had been utilised. The report states that the environment and forest regulatory and executive structures possess neither the capacity, nor the knowledge base to administer CAMPA effectively. It highlighted that the government did not do enough in promoting compensatory afforestation. Moreover, there was rampant unauthorised usage of land for mining purposes instead of afforestation. CAMPA was also opposed on the grounds that it has an “institutional structure dominated by the bureaucracy, with little democratisation or accountability”, as per a Wire report. This was also mentioned in the CAG report: “inadequate representation of the tribal people, environmentalists, subject experts and academics.”

Considering all this, the state needs to stop using Compensatory Afforestation Fund Act against the implementation of the Forests Rights Act. This can go a long way in protecting the rights of tribal communities and environment, which no amount of monetary compensation can offer.

Image courtesy: Ahsanul Haque, Wikimedia Commons (CC BY SA-4.0 International)



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