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Forest Smart Brief on Extractives

Extractive Industries in Forest Landscapes: Balancing the Trade-offs and maximizing the benefits


About 3.5 billion people live in countries rich in oil, gas, or minerals. Many of these countries also suffer from poverty, corruption, and conflict stemming from weak governance. Nonrenewable mineral resources play a dominant role in 81 countries, which collectively account for a quarter of gross world product, half of the world’s population, and nearly 70 percent of those in extreme poverty. The World Bank Group’s involvement in extractive industries seeks to help countries seize the opportunities that mining companies offer for development, poverty reduction, and boosting shared prosperity. Most World Bank Group interventions in extractive industries are in the governance area, to encourage transparent management of industry revenues so that they provide benefits for local people and so that the industries themselves respect local community needs and the environment.

At the same time, more than one-quarter of the world’s active mines and exploration sites overlap with, or are situated within a 10-kilometer radius of, a strictly protected area. Nearly one-third of all active mines and exploration sites are located within areas of intact ecosystems of high conservation value, most of them forests. Almost one-third of all active mines are located in stressed watersheds. Infrastructure developments associated with oil and mineral developments represent the most important threat to ecosystems through physical incursion into forests and disruption of the ecosystems.  Road and railway development could be particularly harmful. Building a new road drives direct deforestation through tree cutting, but this impact is generally limited. Most importantly, roads are the major vehicle for forest degradation through further incursion into forest areas for agriculture, hunting, artisanal mining, and other potentially harmful activities. Added to that, a large-scale mine has considerable energy requirements, which will lead to the construction of hydropower dams, oil and gas pipelines, and powerlines. At the same time, oil and mining companies can contribute considerably to sustainable forest management, and have done so in the past, by implementing measures for forest conservation and community development in and around their concessions.

There is increasing pressure on individual companies to implement standards to mitigate and offset negative environmental impacts. Yet there is a limit to what private-sector-driven, project-specific measures can do.  These kinds of voluntary standards also tend not to affect artisanal and small-scale miners and other "rogue" players, who tend to have the largest environmental footprint. In order to address all players, an integrated landscape-level planning and enforcement process is needed.


This program will transform the way the World Bank Group works with its clients on extractive industries in forest-rich countries, so that oil, gas, and mineral extraction contribute to sustainable forest management and poverty reduction for the people depending on those forests. The program also introduces this knowledge to the Bank's vast networks of private companies and government partners.

Program components have been chosen based on assessing the most urgent issues impacting the forest sector and the existing World Bank Group projects that have potential impact and replicability, in which this program can learn from and/or build upon. This program presents four pillars that provide the backbone of research for the studies:

  1. The first pillar of this program is resource corridors—a sequence of investments and actions to leverage a large extractive industry investment in infrastructure, goods, and services into viable economic development and diversification along a specific geographic area. Case studies will develop good practices for "forest-friendly" corridor planning and development
  2. Artisanal and small-scale mining (ASM) is the second pillar. ASM is still by far the largest mining sector in most developing countries in terms of employment. More than 100 million people worldwide rely on this sector for income. Because of the often informal nature of ASM, its impacts—both direct and indirect—are much harder to regulate and mitigate than those of large-scale mining. Case studies will build upon lessons from both past and ongoing projects to come up with concrete recommendations on how to address the impact of ASM on forests before, during, and after mining activities.
  3. The third pillar of this program is climate-resilient development. Climate change exacerbates the negative environmental and social impacts of mining and its associated developments. Mining-induced land use change can reduce resilience by driving deforestation and loss of forest resources. But if well-planned and regulated, mining can also contribute to climate resilience, for example through REDD+. This "climate-smart mining" component will build upon existing projects on extractives, deforestation, and climate change. The lessons learned will help forest- and mineral-rich countries effectively develop climate-resilient policies that promote the systematic integration of climate change considerations to address issues related to the extractive industries and ecosystems vulnerability.  Doing so will work to ensure the long-term sustainability of the environment, industry, and local development.
  4. The fourth pillar deals with mine reclamation, which can create useful landscapes that meet a variety of goals—from the restoration of productive ecosystems to the creation of industrial and municipal resources. The case study will look at the existing situation, as well as existing good and bad practices, and will come up with recommendations for a forest restoration strategy for existing mine sites. It will also address opportunities, challenges, and obstacles to achieving better mine site rehabilitation in forested areas, focusing on small-scale and informal mines.

The main outputs of this program will be research reports, toolkits, policy papers and recommendations, and multi-stakeholder dialogues (through workshops, webinars, and round table discussions.


Results to date include a detailed analytical framework to provide consistency among the different case studies and serve as the underpinning for research. The analytical framework has been presented to a core group of stakeholders and was refined based on feedback. Based on this analytical framework, two major studies will be conducted on 1) how to make small scale and large scale mining ‘forest smart,’ 2) lessons from both good and bad practices in different parts of the world. In the process of completing the studies, communication with stakeholders will be conducted along the way to enhance knowledge and increase the relevance of program results to key stakeholders

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Last Updated : 10-05-2017