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Sustainability and restoration of Lao PDR’s Forests


Lao PDR has 9.5 million ha of forest cover, representing about 40% of land area. Deforestation rates are very high and as much as 80 percent of the country’s forests are now degraded. Despite government efforts to reverse these negative trends by reducing illegal logging and aggressively prosecuting forest crimes and corruption, considerable damage has already been done. Under this context, the Ministry of Agriculture and Forestry (MAF) and the Department of Forestry (DOF) are working to institute stronger measures to foster Sustainable Forest Management (SFM) and to restore deforested areas or highly degraded forests, which incorporates SFM certification, timber legality assurance systems, and reforestation. 

SFM certification in Laos and its border countries is still in its infancy. Altogether, only around 135,000 ha are certified as sustainably managed—80 percent which are in plantations in Vietnam and Thailand. In Lao PDR, only 10,949 ha of natural forests and 2,606 ha of plantations were certified as sustainably managed (as of January 2017). Cambodia has only 7,000 ha certified and Myanmar has none. 

Barriers to forest certification in Laos include (i) an inadequate enabling environment to foster certification of a significant level for protected forest areas (PFAs) and associated forest products; (ii) lack of perceived benefits; (iii) complex, unclear and prohibitive costs for village plantation group certification; and (iv) lack of a Lao unified group certification system. There is, therefore, a need to develop and disseminate state-of-the-art knowledge in Lao PDR that can demonstrate that forests managed in sustainable ways can provide long-term economic and financial returns for the country, industry and rural communities while generating positive environmental and social benefits.


This activity aims to strengthen understanding of issues, lessons learned and key actions to: i) review forest implementing policies, legal instruments and institutional frames for participatory SFM, forest restoration and reforestation; ii) increase role of certification (sustainability) and verification (legality); and iii) better understanding of the contribution that forests make towards sustainable livelihoods and mitigation of climate change. These outcomes are closely aligned with the Lao PDR Green Growth Development Policy Financing (DPF) operations, which aim to increase Production Forest Area (PFA) Certification to around 230,000 ha from the current 10,949 ha.

The work is being organized into six sub-studies, one final synthesis report, and two validation workshops. The studies will focus on: sustainable forest management; certified wood products; policy support for SFM, chain of custody, and a timber legality assurance scheme; public-private partnerships for forest restoration; economics of certified sustainable forest management; and a retrospective on forest sector development.


The project process improved Government of Lao PDR (GOL) technical knowledge and understanding of the topical issues. This was reflected in all recent leadership and technical meetings, with shared urgency to continue the pathway of reform initiated in parallel to this activity. Some key issues include:
  1. More holistic approaches to SFM, including participatory forest management, restoration and reforestation options and trade-offs;
  2. Differentiation between participatory SFM in natural forests, especially village forestry, and private sector investments in plantation forests (including through outgrower schemes or smallholder plantations), including fiscal incentives and/or tax exemptions for plantation investors certifying their plantations and/or adopting socially and environmentally responsible approaches;
  3. The use of certification for proof of sustainability from production forest areas (PFAs) and plantation forests and verification for proof of legality for forest conversion areas for future unimpeded access to the increasing number of countries with public procurement policies requiring these SFM tools;
  4. Clarifying, streamlining and strengthening the wood products supply and value chains to improve returns to producers and growers;
  5. Investment into innovative new forest industries technologies to increase utilization efficiency, outturn, conversion factors and added value;
  6. New modalities for land-use rights, social and environmental standards and benefit sharing for public-private-people (community) partnerships for cooperation to up-scale restoration and reforestation; and vii)  application of financial and economic analyses of production forest models, with and without certification and with/without carbon credits to make informed natural and planted forest management policy and investment decisions.  
There is evidence that the project had an impact on improved understanding of some critical issues and was a catalyst for dialogue to address these issues. Besides key products mentioned above, the activity process has supported approved and on-going legal and regulatory reforms of the forestry and forest industries sectors as part of the on-going dialogue on the enabling environment for SFM, including: 
  • PMO 9 on use of PFA lands for private industrial plantation forests + MAF Instruction on implementation (2018); 
  • MAF Ministerial Instruction on Development of TLAS (2018); 
  • Forestry Law (TLAS implementation; forest management and chain of custody (CoC) certification; PSFM; Plantation forestry in PFAs; Promoting and streamlining smallholder plantation forestry; Promoting private industrial plantation forestry; and village forestry) (2019);  
  • Decree 96 on Promotion of Commercial Plantation Forests (2019); 
  • MOIC draft Decision use of CoC certification in the supply chain; 
  • MOIC draft Regulation of Sale and Purchase of Timber (2nd Log Landing); 
  • SUFORD-SU satellite assessment of severely degraded forest lands in PFAs suitable for industrial plantation forests (2018); 
  • Process for enabling private sector for reforestation and restoration in PFAs commenced; and 
  • Certification process ongoing (FSC FM 85,000 ha; FSC CW 90,000 ha). 
In addition, 
  • Regular and open dialogue has been established with particularly Ministry of Agriculture and Forestry, Ministry of Industry and Commerce, Ministry of Planning and Investment and Department of Forestry; and the private sector (forest plantation and wood industries sectors), NGOs and CBOs; 
  • A high level national seminar in March 2018 chaired by the Deputy Prime Minister and attended by MAF representatives from 18 provinces and key ministries, the private sector and other key stakeholders. The Seminar outcomes has set stage for potential public-private-people partnerships opportunities in PFAs for forest restoration and reforestation. 
Investments influenced 
The findings of this project, included in this synthesis report, have influenced the design of two IPFs, notably 
  • AF-SUPSFM (P170810) (IDA 5m) which was appraised in October 2019, to be negotiated on December 17, 2019. 
  • Lao Landscapes and Livelihoods (P170559) (IDA 50m + GEF 7.3m), PCN review meeting scheduled for December 16, 2019. 
  • Green Growth DPO2 (P171431), negotiated and approved in May 2019. 
  • Performance and Learning Review of the CPF, decision meeting on December 9, 2019. 


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Last Updated : 06-09-2020