Principle - Society accepts responsibility for sustainability.

Criterion - There is equitable access to and distribution of economic rents.

Indicator (Original Wording) - Mechanisms for sharing the benefits are seen as fair by local communities.

Indicator (Revised Wording) - Mechanisms exist for sharing the economic benefits derived from forest management.

Box B: Definition:

The sharing of economic benefits or "rent" involves the distribution of financial or economic benefits that result from the use of the resources. Mechanisms for sharing benefits include such mechanisms as the technical distribution of economic rents among key actors, royalty payments, taxes, percentages of income paid to persons or transfers and contributions to communities that follow some agreed upon procedure.

Box D: Applicability to Different Landowners. Explain any differences.

N/A

Box E: Overlap:

CIFOR – ECON C3.3, "Equitable distribution of economic rent";

Notes:

Does not apply above a scale with identifiable land tenure and/or political divisions.

Note: This classification does not apply to socioeconomic systems.

Box I: Underlying Concepts:

Following Ruitenbeek’s (1998) discussion, economic rent related to forestry management is typically divided among four key players: the owner of the forest resource (which can be either public or private sector), the manager or operator, the consumer, and local individuals and communities. The actual level of rent realized, and the division of rent among these players, depends on a large array of institutional, policy, legal and technical circumstances. For example, the royalty, fee or tax or market regime can have a significant effect on how much resource value is generated, and how much of it accrues to an owner. The manager, who may be responsible for any or all of logging, replanting, processing or marketing of the products, will typically enjoy a share of the rent or perhaps a subsidy. Domestic consumers may also share in the rents through consumption subsidies. Rent shares to consumers are typically low, except in instances where entire forest stands have been turned over to communities to manage. Finally, local individuals or communities may be compensated through direct or transfer payments.

Box J: Relevance to Sustainable/Unsustainable Management :

The issues relating to sharing economic benefits, aside from the technical aspects of exactly who gets what and how much, arises from the intra-generational equity principle often found in discussions of sustainability (e.g., Ekins, et al, 1992; Selman, 1996). This principle, generally stated, deems that all persons should have equal opportunity to benefit from the use of resources. In this perspective, the mechanisms for sharing economic benefits are seen as pertinent to forest management sustainability.

Mechanisms for benefit sharing are also relevant from the perspective of justice, which forms a part of human well-being. A greater perception of fairness of the mechanisms may inspire greater trust between the stakeholders, which has benefits including greater human well-being, less likelihood that local peoples will be comfortable continuing to engage in negotiations, and in being able to express their perspectives. Fair distribution of benefits, which may be connected to higher levels of well-being, in some cases can contribute to less local impact on resources.

Box K: Measurement Methods :

The most straightforward method to determine the existence of benefit sharing mechanisms is simple tabulation. Using a grid, types of benefit sharing mechanisms can be indicated for the various actors. Grid cells without entries may indicate (but not necessarily) missed opportunities for benefit sharing. The general grid with possible types of entries is shown below:

Box L: Data Required :

See the benefits sharing grid above.

Box M: Data Used for the North American Test:

Box N: Example Results:

See the benefit sharing grid for the study area above.

Box O: Assessing the Practicality :

The benefits sharing grid is a simple and concise method for addressing this indicator.

Box P: Assessing the Information Value :

The benefits sharing grid is a simple and concise method for addressing this indicator. It has a high information content.

Box Q: Overall assessment :

Accepted.

Strengths:

• The indicator is relatively easy to track over time;
• Generally low cost
• Gives a direct measure of benefit sharing mechanisms.

Weaknesses:

• Some mechanisms may be informal and not obvious.

Box R: Did you rewrite or revise to a new indicator. If so what?

The statement of this indicator was revised to "Mechanisms exist for sharing the economic benefits derived from forest management".

Box S: References:

• Ruitenbeek, H. Jack and Cynthia Cartier. 1998. Rational Exploitations: Economic Criteria & Indicators for Sustainable Management of Tropical Forests. CIFOR working paper, draft of April 1998.
• Ekins, Paul, Mayer Hillman and Robert Hutchison 1992. The Gaia Atlas of Green Economics. Anchor Books, Doubleday. New York.
• Selman, P. 1996. Local Sustainability: Managing and Planning Ecologically Sound Places. St. Martin’s Press, New York.

Please record your notes on evaluating the indicator here.