The Rainforests of Cameroon - PROFOR

40 The Rainforests of Cameroonrepresentatives of trade unions, individual experts, and an independentobserver. The independent observer is a private individual from outsidethe government who attends meetings of the Interministerial Commission,reviews bidding documents, observes the process for making awardrecommendations, and prepares a report for the Minister of Forests onthe integrity of the process.The selection criteria and procedures are governed by regulations thatare periodically revised in light of lessons learned from successive roundsof auctions. Bidding rounds are preceded by public sessions to explainthe system to potential bidders. Any company registered in Cameroonmay compete. 1 Detailed instructions are provided to bidders in the biddingdocuments, and the procedures for evaluating bids are detailed inpublished official acts. The selection criteria are financial and technical(including the firm’s technical capacity, its prior industrial investmentsand financial strength, and its respect for fiscal and environmental commitments).The financial offer is based on the value of the area tax offeredper hectare and per year, in excess of the floor value prescribed by theFinance Law. 2 (For additional discussion of the merits of the bidding system,see appendix 4.)Companies awarded UFA concessions have 45 days to provide anadvance guarantee bond (lettre de garantie), which is equivalent to onefull year of area tax. Companies failing to pay by the agreed date areexcluded, and concessions are awarded to the second-highest bidder.For a discussion of how the area fee could influence loggers’ behavior,see box 3.4.Performance of the Auction SystemA quantitative measure of the performance of the auction system is thevalue of the annual area tax, which was previously set by the administrationbut became subject to bidding after the auction system was introduced.The area tax has increased substantially since the auction systemcame into force. While other factors such as the international market andforest quality certainly affect the bids that are offered, there is no doubtthat implementation of the auction system initiated the rise in bids forharvesting rights. 3The efficiency of Delivered the auction by The World system Bank depends e-library to: to a great extent onThe World Bankensuring genuine competition IP and : 192.86.100.34 confidentiality. Competition and confidentialityalso ensure that Mon, bids 09 Nov truly 2009 express 17:06:18 willingness to pay. Sustainedperformance depends on frequently updating rules and processes(c) The International Bank for Reconstruction and Development / The World Bank