Regulation in the Mekong Region: What is it? Why now?

Regulation in the Mekong Region: What is it? Why now? MRLG Workshop on RAI in the Mekong Region Vientiane, 15 17 Nov. 2017 Michael Dwyer University of Colorado-Boulder, Geography Dept. and Center for Asian Studies University of Bern, Centre for Development & Environment Forest Trends

Overview 1. Introduction 2. Regulation in practice 3. Toward better regulation with an example 4. Conclusions

1. Introduction 2. Regulation in practice 3. Toward better regulation with an example 4. Conclusions

Regulation We should be thinking about: 1. Outcomes rather than Documents (Regulation as a complex practice) 2. The Purpose rather than the Mechanism or the specific Rules

Regulation We should be thinking about: 1. Outcomes rather than Documents (Regulation as a complex practice) o Rules on paper (laws, policies, regulations) o Institutional capacities & enforcement budgets o Bureaucratic turf struggles o Bilateral relations o Company policies & approach to risk o Community governance o Community access to donor or CSOs o Other local conditions on the ground

Regulation We should be thinking about: 1. Outcomes rather than Documents (Regulation as a complex practice) 2. The Purpose rather than the Mechanism or the specific Rules Regulation: the adequate restraint of opportunistic behavior (Duane 2002) Duane 2002, Regulation s rationale: Learning from the California Energy Crisis. Yale Journal on Regulation v. 19: 471 540

Opportunistic Behavior = practices that benefit small groups but harm the public (Duane 2002) But what is the public? Duane 2002, Regulation s rationale: Learning from the California Energy Crisis. Yale Journal on Regulation v. 19: 471 540

Opportunistic Behavior = practices that benefit small groups but harm the public (Duane 2002) But what is the public? the nation the environment the bureaucracy communities Duane 2002, Regulation s rationale: Learning from the California Energy Crisis. Yale Journal on Regulation v. 19: 471 540

Argument Regulation in practice today too often fails to serve the interests of local communities by prioritizing the nation the environment the bureaucracy communities (and by local elites by default) and needs to be adjusted to better include all members of society.

1. Introduction 2. Regulation in practice 3. Toward better regulation with an example 4. Conclusions

The Nation Eminent domain with socialist characteristics Prioritizing economic growth & the state land concession model High rates of land conflict Reforms (e.g. Lao Land Law: public vs. investment purposes ; Cambodia Order 01: Leopard Skin )

Leopard Skin Development Source: OpenDevCam Source: Grandis Timber

The Environment Variation on national benefit Good intention, but can displace development onto local communities ( overlap ) Tries to replace local land use, but actually displaces it

Source: Dwyer 2013, Development and Change

The Bureaucracy Simplified turf model of regulation Production Forest Protection Forest Conservation Forest Source: Dwyer 2017, Lao Land Tenure Baseline (UN-REDD+)

The Bureaucracy Simplified turf model of regulation Selects against cross-cutting model Repeated but ineffective calls for coordination Serves institution in charge over interests of the public, local communities, and even (sometimes) investors

The Bureaucracy Simplified turf model of regulation Selects against cross-cutting model Repeated but ineffective calls for coordination Serves institution in charge over interests of the public, local communities, and even (sometimes) investors Coarse spatial resolution

Production Forest Protection Forest Conservation Forest Source: Dwyer 2017, Lao Land Tenure Baseline (UN-REDD+)

Land reserving (japjong din) Customary practice De facto privatization of community lands Defense against losing land to concessions Undermines good-faith company efforts to negotiate for access to community lands Elite land grab

1. Introduction 2. Regulation in practice 3. Toward better regulation with an example 4. Conclusions

Agricultural land: one of the bases of national sovereignty[;] you can easily imagine the risk of a social outcry when such land falls into foreign hands. Land deals: considerable concern, demand the rapid adoption of corrective measures. Diouf 2008, The Food Crisis and the Wrong Solutions

Land Deals & the Agrarian Transition Consider the predicament of people who are displaced from their inefficient farms in a context where the generalized capitalist system fails to provide them with an alternative livelihood or a living wage. In much of the global South, the anticipated transition from the farm to factory has not taken place, and it is nowhere on the horizon. (Li 2011) Photo: Dwyer 2008

IKEA case Consider the predicament of people who are displaced from their inefficient farms in a context where the generalized capitalist system fails to provide them with an alternative livelihood or a living wage. In much of the global South, the anticipated transition from the farm to factory has not taken place, and it is nowhere on the horizon. (Li 2011) Photo: WWF 2017, The Guardian

IKEA case Trying to remedy (1) high reliance on illegal imported timber and (2) low degrees of value-adding nationally (e.g. wood chips), and (3) rural poverty/underdevelopment Photo: WWF 2017, The Guardian

IKEA case IKEA linkage model: Ikea Standing orders Suppliers Contracts Wood processors Nonbinding agreements Smallholders Low or zero%-interest loans to smallholders & price premiums: incentivize longer rotations, bigger wood, furniture >> wood chips Land use certificates in rural upland communities FSC certification (demanded by IKEA)

IKEA case (2) Limits Legally tenuous: Agreements with smallholders non-binding Economically tenuous: Profit margins low for both wood processors and smallholders Certification is expensive Forestland certification is slow, cumbersome, not enough Implications Model is promising but not already perfect successes and shortcomings are both instructive State regulation to replace certification would help but is still not sufficient

Multi-Scalar Evidence-Based Dialogue: A Regional Approach to Improving Smallholder Land Tenure Forest Trends (LMV) Center for Policy Studies (C) Ikea hpp://publicarons.mrlg.org/wp-content/uploads/2016/03/mulr-scalar-evidenced-based-dialogue-a-regional-approach-to-improving-small-holder-land-tenure-final.pdf

1. Introduction 2. Regulation in practice 3. Toward better regulation with an example 4. Conclusions

Summary 1. Regulation: adequate constraint of opportunistic behavior against the public 2. The public is complex: nation, environment & future generations, bureaucracy, and local communities. Regulation-inpractice often disadvantages poorer members of communities in favor of others groups, and needs to be amended. 3. Lots of negative examples to learn from; fewer positive ones -- let s learn from both. 4. Proper roles for business, local land users, the state and civil society, and we need transparency in order to get the details right. 5. Specifically, we need an adjustment of regulation-in-practice to give smallholder producers a fairer and more realistic chance.

Final Thoughts 1. Don t be too realistic. Expect more of the state as a complex institution capable of protecting the public interest. 2. RAI demands not only better regulation of private investment, but more and better public investment. These can be a virtuous circle

Acknowledgments & Contact information Mike Dwyer: dwyerdwyer@gmail.com CU-Boulder: https://www.colorado.edu/geography/mike-dwyer Uni Bern: http://www.cde.unibe.ch/about_us/personen/dr_dwyer_michael/index_eng.html Personal website: https://dwyer.wordpress.com/