Institutional Mechanisms for REDD+ - Case Studies Working Paper

4.3.1 OVERVIEW OF KEY INSTITUTIONS
As of 2011, a project-level FCTF has been established and is operational.
The FCTF provides an institutional arrangement for managing and disbursing REDD+ payments to CFUGs
participating in the project. Operational guidelines (for the FCTF have been developed (Operational Guidelines,
2011), which outline the specific roles and responsibilities of involved institutions and prescribe criteria for
disbursing payments. The guidelines attempt to adhere to the principles and concepts in Nepal‘s R-PP in
order to facilitate future scaling.
Figure 4.4 depicts the institutional structure of the FCTF. In this structure, central government and district
government are engaged as stakeholders via the FCTF Advisory Committee and the Watershed Fund
Advisory Committee (WAFAC). These Committees provide overarching strategic guidance and oversight at
the project and watershed levels respectively. In addition, one representative from the District Soil and
Watershed Conservation Office (central government) sits on the monitoring committee. Community-based
organizations, such as FECOFUN and NEFIN, are also represented on these committees.
The most important strategic and operational responsibilities with respect to payment distribution are held by
the Project Management Unit (PMU), which is jointly coordinated by the three project partners (ICIMOD,
ANSAB, and FECOFUN). The PMU reviews payment claims and disburses payments to the three
Watershed REDD Networks established by the project. Each Watershed REDD Network consists of one
representative from each participating CFUG. The Watershed REDD Networks are then responsible for
distributing payments to CFUGs according to FCTF criteria and under the guidance of its WAFAC. Once
CFUGs receive payments, they are expected to operate in accordance with their existing constitutions and
governance structures. They must also adhere to specific project requirements related to financial
transparency and utilization of funds.
4.3.2 FUNDING SOURCES
A four year grant from NORAD for $750,000 US per year (Funding to Civil Society, 2009) has enabled
ICIMOD, ANSAB, and FECOFUN to establish the FCTF institutional mechanism described above and to
provide seed funding to the three Watershed REDD Network for activities that will contribute to improved
forest management and livelihoods in the participating CFUGs. The NORAD grant will also support pilot
payments for verified carbon sequestration. After 2013, the goal of the project is to enable markets and/or
donors to buy certified emissions credits from the FCTF. The members of the Watershed REDD Networks
in Chitwan and Gorkha that were interviewed for this case study shared this expectation.
Beyond the REDD+ project, the participating CFUGs are likely already managing revenues from the sales of
forest products, and potentially from external sources, such as government or donor grants.
4.3.3 LINK BETWEEN LAND RIGHTS AND COMMUNITIES’ ACCESS TO BENEFITS
This pilot project builds upon Nepal‘s well-established Community Forestry model. The Forest Act of 1993
empowered District Forest Offices to hand over rights and responsibilities for managing parts of national
forests to a registered CFUG. A CFUG is legally formed if forest users in a particular location form a group,
develop a constitution, and register it in the DFO. In principle, the process to identify legitimate forest users
to constitute a CFUG is intended to be an inclusive and bottom-up process facilitated by the DFO, but some
experiences suggest that the process can sometimes reinforce group domination by local elites (Thoms, 2007).
The group must also develop a forest management plan (known as an ―operational plan‖ or OP) that must be
approved by the DFO every five years. Upon approval of the OP, the CFUG is given broad rights of access,
withdrawal, management, and exclusion. In practice, lack of capacity among DFOs has resulted in a
PRRGP INSTITUTIONAL MECHANISMS FOR REDD: CASE STUDIES – WORKING PAPER 81