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A number of proposals related to financial assistance were addressed, many of which were referred to a contact group.

FINANCIAL ASSISTANCE: The G-77/CHINA proposed that international organizations increase the proportion and availability of ODA. He objected to language limiting recipients to developing countries where private investment has been low. CANADA emphasized the importance of concentrating on these countries’ needs. The US advocated replacing “management, conservation and sustainable development of all types of forests” from the Forest Principles with “SFM,” but the G-77/CHINA noted that the SFM is only one component of the former. SWITZERLAND said assistance should also be given to countries poor in forest resources and who have developed policies to encourage SFM.

The US proposed adding “or other relevant policy processes” to bilateral and multilateral organizations’ use of “national forest programmes” as a framework, as “NFP” is sometimes used restrictively. CANADA and the EU advocated maintaining “NFPs”. MEXICO deleted a reference to national-level forest assessments.

On multilateral organizations’ forest programmes, the US proposed replacing “forest and forest-related activities” with “SFM activities,” but several delegations objected.

After proposals by the EU, SWITZERLAND and the US to delete a paragraph on clarifying the gap in resources to achieve SFM, discussion focused on whether a “gap” can be defined. The US and JAPAN preferred language requesting clarification of available resources for achieving SFM while the EU preferred requesting identification of urgent priority needs for developing countries. JAPAN asked for guidelines to determine the percentage of ODA going to forests. INDIA proposed using Agenda 21 figures to determine the global gap. References to international financial institutions and the donor community were added to text reccomending that UN organizations clarify the resource gap.

On innovative ways to use financial mechanisms and generate additional resources, there was general agreement that “forest-specific” resources should include resources from “within and outside the forestry sector.” BRAZIL proposed language on “new and additional” financial resources. CANADA rejected “new” but supported the concept of devoting additional resources to forests. MALAYSIA and the PHILIPPINES opposed weakening Forest Principles language. GABON proposed language calling for developed countries to find solutions to developing country debt, to which the US added debtor countries. Delegates agreed to refer to the debt problem, either in this or a new paragraph.

PRIVATE SECTOR INVESTMENT: Delegates removed brackets around “voluntary” codes to guide investments. The US proposed a new formulation to focus on the role of the private sector in implementing voluntary codes of conduct. MEXICO added language on mechanisms to reinvest income from forest products back into the forest sector, but the US proposed “ways” as less prescriptive than “mechanisms.” The US, supported by CANADA and INDONESIA but opposed by AUSTRALIA, noted that adopting policies for full cost pricing is premature. CANADA said it is the private sector, not governments, that should develop voluntary codes.

Regarding incentives in developed countries for private sector investment in SFM, the EU added a reference to countries with private overseas investment in the forest sector. The US deleted a reference to tax breaks as incentives. GABON proposed language calling on developed countries to adapt policies and formulate incentives that encourage the private sector to follow SFM principles and to invest in forest sectors in developing countries.

NATIONAL CAPACITY AND COORDINATION: After several proposed deletions on country-driven NFPs, delegates agreed to refer the definition of NFPs to Working Group I. The US specified that “recipient” countries should reflect their national priorities in their efforts and that donor “countries and” agencies “support,” rather than “finance,” national initiatives “to establish forest programmes and national policy frameworks.”

The US added a reference to employing “other economic instruments” to market-based instruments. INDIA recommended “internalizing” rather than “reducing” social costs and environmental impacts.

After attempts to amend text on community financing, language based on a proposal by SWITZERLAND to “enhance community-based forest management systems, including community financing as a fundamental strategy” was debated. VENEZUELA proposed language stressing that mechanisms should be within the constitutional and legal framework of each country and referred to indigenous groups and land and forest owners. International organizations and institutions and multilateral financial institutions were added to the list of bodies which should enhance community-based efforts.

CANADA removed language on decentralizing planning and implementation of development activities and referred it to Working Group I. Delegates also deleted subparagraphs on: involving all concerned national bodies in planning, implementation and monitoring processes; pooling national resources to improve efficiency; and creating an enabling environment for the use of environmentally sound technologies.

On identifying national authorities to coordinate deployment of finances, the US recommended specifying “recipient” countries.

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