Welcome to the third edition of the BAT Biodiversity Partnership Bulletin in 2010

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1 Welcome to the third edition of the BAT Biodiversity Partnership Bulletin in 2010 This issue is themed around Partnership activities relating to forest management, conservation and restoration. Forests represent some of the most bodiverse areas on Earth; they play vital roles, sequestering carbon globally, protecting water catchments and soils, supplying wood and other goods and supporting livelihoods and quality of life. Yet deforestation continues at an alarming rate - each year about 13 million hectares of forests are lost. Forests cover nearly 4 billion hectares or Tropical forest at Danum Valley, Borneo 30 percent of the world s land. About a third of this is primary forest - with few signs of human activity - but 6 million hectares of primary forest are being lost or modified each year. New plantations are being established, but do not offer the range of habitats or ecosystem services that natural forests provide - and in some instances they are replacing natural forest. Deforestation is a major global driver of biodiversity loss. Forests are particularly important as stores of carbon: the carbon stored in forest biomass, deadwood, litter and soil together is roughly 50 percent more than the amount in the atmosphere. So deforestation is also a major contributor to the enhanced greenhouse effect. The root causes of deforestation include increasing global demand for forest and agricultural products, corruption, poverty, population growth and urbanization. It is much easier to value short term gains from selling timber or clearing new land for farming, than the long-term economic benefits of forest conservation to communities, countries and the planet. We are still awaiting a means by which developed countries (which cleared their forests long ago) can compensate developing countries for the opportunity costs of preserving their forests for the sake of all. However, efforts are being made to assess the economic value of forest and ecosystem services and look at ways to slow the rate of forest loss through initiatives such as payment for ecosystem services, Reducing Emissions from Deforestation and Forest Degradation (REDD) and the UN supported study on The Economics of Ecosystem and Biodiversity (TEEB). According to the UN Framework Convention on Climate Change, agriculture is the overwhelming direct cause of deforestation. Small scale farming is responsible for 42% of deforestation and degradation; commercial crops 20%; large scale cattle ranching 12%; commercial timber extraction 14%; fuel wood and forest products gathering 6% and traded fuelwood and charcoal 5%. In this edition, you can take a look at what the BAT Biodiversity Partnership is doing with local stakeholders and partners on the ground to bring about sustainable ways of managing and restoring forest and ecosystem services in Uganda, Brazil, Chile and Sri Lanka and other countries. We hope you enjoy reading about our work. The BAT Biodiversity Partnership

2 PROJECT SPOTLIGHT REDUCING RELIANCE ON NATURAL FORESTS FOR WOOD FUEL HOW SOUZA CRUZ IS GROWING A GREEN CORRIDOR Most of BAT s tobacco farmers use fuelwood to cure their crop, and the tobacco industry in general is criticised for driving deforestation... The green corridor concept is a tangible way to begin to protect and connect fragments of forest... REDUCING PRESSURE ON NATIVE FORESTS IN UGANDA THE LEGACY OF REDUNDANT EUCALYPTUS PLANTATIONS KEY ACHIEVEMENTS Many non-government organisations (NGO's) and forestry experts are working to find solutions to deforestation in Uganda... BAT leaf growing operations in Chile and Sri Lanka have an opportunity to look at ways to return these plantations to near-native forests.... Read more about some of the Partnership s latest achievements... BATBP 2010

3 PROJECT SPOTLIGHT - Ecosystem Services Q3/Q Regeneration from Eucalyptus plantations to near - native forest in Chile and Sri Lanka During the second half of the 20th Century eucalyptus trees were widely planted around the world. BAT Operating Companies were part of this trend, establishing large plantations of these fast growing exotics in several countries, as a source of fuelwood or for other supposed benefits. In some cases, where these plantations are no longer required, the question arises how they could be restored to as near native forest as possible. What do you do when your solution becomes a problem? BAT leaf growing operations in Chile and Sri Lanka both have a legacy of redundant eucalyptus plantations. This was an opportunity for both companies to look at ways to return these plantations to near-native forests with all the biodiversity and ecosystem service value gains these would represent. By initiating a process of regeneration the aim is to reduce the risk of fire, improve soil quality, lower water demands, increase biodiversity in threatened areas and provide models for other regeneration work in comparable ecosystems. While the opportunity is similar, the circumstances are very different. In the Casablanca Valley in the central plains of Chile, 80 hectares of eucalyptus were planted about 20 years ago around the Chiletabacos factory as a source of fuel for the factory and to act as a buffer for the original site which was a car factory. The site contains three wells which the BAT Re-generation site in the Casablanca Valley, Chile factory relies on for its water requirements. In Sri Lanka, the Ceylon Tobacco Company (CTC) had nine eucalyptus plantations totalling 500 Hectares, planted in the 1980s as a source of wood fuel. CTC farmers now use paddy husk to cure their tobacco. As restoration ecology is still a relatively new science - certainly in the case of eucalypts - the major challenge for both these projects was to establish the best method for regeneration, in order to advise BAT and others with the same problem on the fastest route back to near natural forest. The native forest type in each case is very different. The plantation in Chile was in an area of dry Mediterranean forest with comparatively low rainfall; in Sri Lanka the native vegetation is tropical semi-moist forest. Both forest types have a distinct cooler dry season and a distinct wet season. In both cases the introduced eucalyptus trees take up more water than native species. By initiating a process of regeneration the aim is to reduce the risk of fire, improve soil quality, lower water demands, increase biodiversity in threatened areas and provide models for other regeneration work in comparable ecosystems. To achieve the goals, the Biodiversity Partnership, and specifically Fauna & Flora International, worked through partnerships with respected national universities (Universidad de Concepción in Chile and the University of Peradeniya in Sri Lanka to monitor and analyse data from pilot sites where eucalypts were cleared and native cover has begun to recover. Five year management plans have been developed for these sites. Using the data and results so far, the Partnership and BAT are beginning to gain a valuable insight into the approaches required. At both sites, eucalypts had to be killed before recovery could start, for comparative Native species ready for planting in Chile analysis of seedling survival under different conditions. In Sri Lanka, once eucalyptus is controlled, natural regeneration appears to be the most cost effective method. In Chile, due to dry soil conditions, amongst other factors, planted native seedling survival is better under a native Acacia pseudosavannah shrub than appeared under the eucalypts. Further data is needed from Chile to confirm this trend. In Sri Lanka sufficient analysis has been completed to build confidence in the right route to ensure flora regeneration beyond pioneer species, and over the next few years the Partners hope to get a better understanding of the fauna regeneration. Peer-reviewed journal articles such as T. Reed, K. Ranawana and A. Nanayakkara, 'Methods tested, and their costs, to control re-growth of coppiced eucalyptus camaldulensis in harvested plantations in Naula, Matale district, Sri Lanka', Ceylon Journal of Science, 38 (2): 75-82, (2009) have begun to be

4 published, and more are in the pipeline. Finally, both sites have generated interest and support from respective Government departments; the Chilean project is now part of the local government's plan to act as a stepping stone between costal and low mountain forest for a number of native birds which may increase native seedling dispersal. In Sri Lanka, the Government will assume control of the plantations in the next year or two, and CTC will continue the work that the Partnership has started. The main site is already receiving a stream of visitors: official and scientific, to see progress in action. Copyright 2010 BATBP ALL RIGHTS RESERVED

5 PROJECT SPOTLIGHT - Ecosystem Services Q3/Q Reducing pressure on native forests in Uganda As part of its commitment to sustainability, BAT has committed to reducing reliance on natural forests to 3% by The Biodiversity Partnership, through the Tropical Biology Association and its local partner Nature Harness Initiatives, is working with British American Tobacco Uganda to meet this target and significantly reduce pressure on native forest resources in Uganda. Seedlings for forest restoration There are many drivers of deforestation in Uganda - significant examples include unsustainable forestry, agricultural conversion, charcoal production, urban expansion and infrastructure development. Over arching all of these drivers is Uganda's significant and unabated population growth. Many non-government organisations and forestry experts are working to find solutions to these problems and BAT Uganda is committed to implementing effective and sustainable management solutions for the resources it depends upon. Although BAT cannot provide all of the solutions, where it can be really effective is by taking a leading role, showing that an individual company can have a positive impact through demonstrating best practice and encouraging others to follow. The community has received hands on, specialist training in apiary establishment and management, fruit tree planting and management and are currently receiving support to upscale activities and bring their products to market. By the end of 2010, the Partnership will have brought at least 850 ha of native forest under sustainable management in Hoima, a process which goes far beyond reforestation and afforestation. In isolation, the process of tree planting cannot secure sustainable forest resources - effective management solutions need to be implemented and the Partnership is working with BAT Uganda to ensure that these solutions are sustainable and embedded into everyday operations. In partnership with the Chimpanzee Sanctuary and Wildlife Conservation Trust, a tree nursery has been established in Itohya, to raise native seedlings, to restore 640 hectares of degraded forest and a further partnership with Navigators for Development, has seen the development of a community managed nursery for the restoration of native forest in Wambabya. In addition to supplying seedlings for forest restoration, the tree nurseries are currently supporting almost 100 farmers to trial and select indigenous species to grow live barns to air cure Burley tobacco. BAT Uganda currently has around 300 farmers using live barns constructed from Eucalyptus and, as part of its programme of afforestation using native species, is committed to finding the most suitable species. A typical farmer requires over 2000 trees to build an average sized tobacco barn and, typically, these are rebuilt annually. Live barns significantly reduce pressure on forests as upright poles are replaced by live trees, which are grown in situ, on the farms. This reduces wood use by about two thirds and barns Live barn using Eucalyptus for uprights undergo annual repairs rather than annual replacement. BAT Uganda is committed to rolling out the live barn programme to all of its farmers, therefore significantly reducing pressure on native forest resources. BAT Uganda currently manages a number of plantations and one biodiversity offset and the Partnership has developed management plans with local communities to ensure that the communities can see tangible and financial benefits to conserving these forests. In Arua, local communities have been given specific grazing rights for their cattle and permission to collect dead fuelwood. Since this has been implemented, no wildfire has occurred in the plantations and it is believed that this is a direct result of the cattle controlling the highly flammable herb layer on the forest floor and the community removing kindling in the form of dead wood.

6 In Hoima, community bee keeping and fruit tree enterprises are being trialled. The community has received hands-on, specialist training in apiary establishment and management, fruit tree planting and management and are currently receiving support to upscale activities and bring their products to market. All these activities are being supported by on the ground capacity building and awareness raising and plans are currently being developed to upscale these activities to reach all BAT Uganda farmers. This will have a profound impact and, not only will this help BAT reach its sustainability target to reduce reliance on natural forests to 3% by 2015, it is also encouraging Harvesting honey in Nyakabingo other resource dependent companies to follow suit, keen to enjoy the same benefits of sustainable resource management and associated reputational gain. Copyright 2010 BATBP ALL RIGHTS RESERVED

7 PROJECT SPOTLIGHT - Ecosystem Services Q3/Q Exploring how environmental legislation in Brazil could lead to green corridors Flue-cured Virginia tobacco is a very important part of the Brazilian economy generating billions of dollars of export revenue and ranking Brazil as the second largest producer after China. Farmers in the state of Paraná in Southern Brazil grow tobacco along side the last remnants of one of the most diverse and threatened forests of the world, the Ombrophile Mixed Forest, or Araucaria Forest. Less than 0.8% of forest cover is left in this landscape where Souza Cruz (the BAT Company in Brazil) obtains around 17% of its tobacco. It is within this context that Souza Cruz, Fauna & Flora International and Brazilian NGO SPVS have partnered to bring about change, initially working within the municipality of Paula Freitas. The green corridor concept is a tangible way of engaging staff within Souza Cruz, their contract farmers, and other farmers and stakeholders in the landscape, to begin to protect and connect fragments of forest. The aim was to identify and understand activities that promote a positive impact on biodiversity in tobacco farms and which could then be replicated in other regions within Souza Cruz's growing operations. National legislation also requires all farms to permanently protect river buffer zones and land over 45 slope, and to designate 20% of the property as a legal reserve for nature. Six farmers are currently piloting experiments to improve biodiversity on their properties, including placing artificial bird perches, observing seed dispersal potential, and using native plants in their gardens to host native fauna. Field survey with a farming couple near Paula Freitas, Brazil. The first hurdle encountered was that most of the 119 farms that joined the trial had either very poor quality fragments of forest or nothing native at all. An assessment carried out with farmers in the first phase of the project showed that this results from perverse incentives (native wood sells at a lower price than eucalyptus), lack of awareness and understanding of the legislation, misconceptions about what a good quality forest is, and the perceived difficulty and cost of complying with the legislation. The partners began raising awareness around environmental legislation, as an issue of value to the company and a mechanism to enable biodiversity education to reach farmers and extension workers, within and beyond the project site. To break inertia, the 119 farmers were given incentives to produce GPS generated maps of their farms, as required by law, to identify the permanent protected areas, and consider restoration of their legal set-aside. Once these areas are registered, they became officially protected for perpetuity. This can facilitate a basic level of connectivity through the landscape along river buffer zones. Financial support enabled 92 farms to achieve compliance; 1, ha of farm properties were measured and mapped, with native forest representing around 570 ha of this total. By the end of 2010, 50 farmers will have submitted their legal reserves and permanently protected areas for registration: 39 with reserves on their properties and 11 with biodiversity easements in a private reserve within the same watershed set up for the farmers through the Partnership. The official process takes about two years from submission to the Environment Agency. In order to tackle misconceptions around restoration, the project offered technical support to farmers who wanted to improve their forest. Three areas were fenced and left for natural regeneration and two areas were planted with seedlings. The project produced education materials including information on these examples. Six farmers are currently piloting experiments to improve biodiversity on their properties, including placing artificial bird perches, observing seed dispersal potential, and using native plants in their gardens to host native fauna. These farms will then act as demonstration sites. The goal of these activities is to improve farmers' understanding of, and promote their reconnection to, native biodiversity. Souza Cruz's response to the risks and opportunities revealed by the project has been impressive. They have restructured their company to include a Sustainability Department; launched a 'Friends of Native Forest' programme that tackles use of native wood for tobacco curing; and set a target of 0% native wood use by Public recognition has come through the State Public Attorney who now recommends Souza Cruz's programme as the standard for other tobacco companies in Brazil. They also recognised the need for training and asked SPVS to help in this regard. SPVS have trained over 240 leaf extension staff on a range of technical issues including environmental legislation, the Green Corridor project, the importance of accurate wood fuel monitoring, and the importance of maintaining native forest.

8 The project has laid the foundations so that when extensive regeneration activities take place they are carried out by farmers who understand the long term value of their commitment and are willing to personally invest in biodiversity beyond the life time of a project, partnership or supply contract. Copyright 2010 BATBP ALL RIGHTS RESERVED

9 PROJECT SPOTLIGHT - Ecosystem Services Q3/Q Reducing Reliance on natural forests for wood fuel BAT buys tobacco from about 250,000 farmers mostly in developing countries. Tobacco uses a small proportion of global agricultural land - about 0.1% - and is similar to other crops in its ecological impacts. However, most of BAT s tobacco farmers use fuelwood to cure their crop, and the tobacco industry in general is criticised for driving deforestation. One widely quoted estimate is that tobacco may account for 5% of Africa s total deforestation. Plantations of fast growing exotic species are part of the solution but do not support ecosystem services like natural forests. They can help take pressure off forests (though not if they are planted on former natural forest land). Efforts are being made to include more indigenous tree species in plantations, but in some cases it may be better to produce as much fuel as possible from small areas of exotics rather than plant large numbers of lower yielding indigenous trees. Helping farmers to become self sufficient in fuel through afforestation is only one way of addressing the issue, and has to be combined with farmer education and training. Helping farmers to become self sufficient in fuel through afforestation is only one way of addressing the issue, and has to be combined with farmer education and training. Efficiency of fuel use is equally vital, as Firewood in southern Brazil there is a wide gap between the most and least efficient furnaces. In several BAT operations farmers now obtain all their fuel needs from alternative fuels such as renewable agricultural wastes. Nevertheless, a small proportion of farmers still harvest wood from natural forests or unsustainable sources. This is a practice that BAT aims to measure, minimise and halt. Harvesting wood from natural forests is BAT s leading biodiversity risk. Moreover, several of the countries where BAT sources tobacco have high background rates of deforestation driven by a wide range of factors. Information currently being gathered through Biodiversity Risk & Opportunity Assessments is enriching our understanding of specific risks and opportunities in each country of operation. Reducing reliance on natural forest is one of the indirect biodiversity measures incorporated in BAT s Sustainability Reporting since The current target is that less than 3% of curing wood will be sourced from natural forest by The Biodiversity Partnership is working with BAT to ensure that existing systems to monitor and report on wood use and afforestation are sufficiently robust to support this target. All BAT companies with agricultural operations produce annual reports on wood use and afforestation. These reports are a vital source of data, based on detailed monitoring by field staff. It is challenging to monitor the behaviour of large numbers of farmers and to measure actual yields from small-scale plantations. Careful analysis of the data indicates that we need clearer and more robust sustainability criteria, with monitoring systems adapted to the conditions in each country. BAT and the Biodiversity Partnership are working with the consultancy group CAMCO to develop robust global definitions of sustainable, and unsustainable, sources of wood; to define effective criteria for assessing categories of wood use in each country; and to test and progressively roll out simple but effective monitoring methods, backed up by independent verification. The aim is to build confidence in the reliability of the data and drive improvements in practice in the industry. Copyright 2010 BATBP ALL RIGHTS RESERVED