Terms of Reference
Case Analyses on Experiences of Formalization of Informal Sectors
CIFOR’s scientific research is dedicated to advancing human wellbeing, environmental conservation and equity through providing information that leads to more informed and equitable decision making about the use and management of forests in tropical countries. We are currently engaged in a research project to provide information to the European Union and policy makers in timber producing countries about the scale and structures of informal domestic timber production, and to analyze the key considerations and potential costs and benefits of promoting formalization in the sector. This project responds to the EU’s changing requirements vis-à-vis its timber imports. In 2003, the European Union launched the Forest Law Enforcement, Governance and Trade Action Plan, known as FLEGT. This process aims to curb illegal logging and timber trading. The key instrument to achieve this goal in partner countries is the Voluntary Partnership Agreement (VPA) licensing scheme, which will rely on various verification mechanisms to assure the legality of timber imports to the EU.
However, in many tropical timber producing countries, much of the domestic timber sector operates in informal economic and legislative environments. Informality in the timber sector presents a challenge in terms of understanding the impacts of logging on forests and verifying the legality of wood entering domestic markets and finding its way into the international marketplace, as well as understanding how markets function and which interest groups benefit along the value chain, especially small-scale and often economically marginalized producers. For this reason, among others, understanding the functioning of the informal timber sector and reviewing and revising legal, policy and institutional frameworks and industrial standards to “formalize” the informal processes surrounding access to forests, extraction and marketing of timber and industrial processing of wood products in producer countries is a course of action under consideration, and a subject of CIFOR’s current research.
In the project “Policy and regulatory options to recognize and better integrate the domestic timber sector in tropical countries,” CIFOR will explore what formalization of the informal timber sectors would entail in practice, and whether and how formalization might be accomplished while safeguarding the interests of small scale, informal, and/or less economically and politically powerful actors. To this end, we seek to learn about the outcomes of cases in which formalization of informal sectors has been implemented. These terms of reference will guide our selection of partners and/or consultants to work with us to research those cases, and form the basis of the study design.
Delimitation and location of 5 cases
Under this project, we are seeking research partners or expert consultants to carry out five separate case studies, two of which are expected to be geographically cross-cutting literature reviews and three of which are expected to be geographically and sector specific. The first cross-cutting study relates to formalization of informal land and resource tenure (with an emphasis on rural/forest lands) and the second to formalization of informal industrial production/processing (with attention to inputs of capital resources and labor, and a general focus on small-scale economic units). The three geographically and sector specific cases will pertain to processes of formalization of specific informal resource extractive sectors, such as logging, mining, fishing, etc., with attention to land/resource tenure, extraction regimes, marketing, and processing as relevant.
The project’s main research on the informal timber sector is conducted in the following “tier one” Congo Basin (Cameroon, DRC, and Gabon), Ecuador, and Indonesia. “Tier two” countries include Ghana, Liberia, Zambia, Vietnam, Colombia, Peru. However, the cases to be researched in this component of the project may be located in other countries, preferably with at least one case in the Amazon region, one case in the Congo Basin region, and one case in Southeast Asia.
The expected output of this project is a report detailing the case selected for research. The language of the report may be English, French, Indonesian, Portuguese, or Spanish (for other languages, please enquire). For the two cross-cutting studies, the expected general format is as follows:
- Literature review
- 3-4 Specific Illustrative examples (likely drawn from the researcher’s past work on the topic)
- Lessons on approaches, implications and outcomes for resource management, people’s livelihoods and economic growth, and trade-offs
- Discussion of implications for national/international policy makers
- Potential Recommendations to FLEGT policy makers (specific to the sectoral issues of land and resource tenure/industrial production, processing and labor) and recommendations for further research
For the three geo/sector-specific studies, the expected general format is as follows:
- Literature review
- Overview and history of sector governance
- Description of formalization process and outcomes, benefits and costs
- Discussion of implications for national/international policy makers
- Potential Recommendations to FLEGT policy makers (specific to the characteristics of the geographic location) and recommendations for further research
For the two cross-cutting cases, the main methods of research will be literature review supported by a complete bibliography, document review, and analysis of several published or unpublished cases that have already been researched by the researcher and/or the researchers’ collaborators, and discussion of those cases in the context of the literature. If unpublished, the researcher will give the CIFOR project leader an overview of the documentation, e.g. methods and field notes, of the cases. A historical perspective is encouraged. For the three geo/sector-specific specific cases, the main methods will include literature review supported by a complete bibliography and document review, semi-structured key informant interviews of different actor groups to be identified prior to the study, analysis of interviews and discussion in the context of the literature. A historical perspective is also encouraged. Researchers will share their interview notes with the CIFOR project leader, but the identities of informants may be kept anonymous.
Main Research Questions (subject to revision and discussion)
The primary research questions we have identified to inform the more detailed study design and report outline, are as follows:
- What were the reasons for the implementation of the formalization processes presented?
- Under what governance and economic conditions was the formalization process conceived?
- This question should address questions of underlying sectoral governance issues, such as financial and organizational capacity of government, corruption, coordination among agencies, rule of law, civil society’s role and capacities, etc.
- Attention should be paid as well to: prior private/individual vs. group/community ownership; rights and obligations of resource ownership, access, and use; factors motivating the formalization process and the stated purposes of policies and laws promoting formalization.
- Economic contributions of the sector, and expected benefit of formalization to national economies and local livelihoods.
- What was/were the approach(es) adopted for formalization and what were the expected outcomes?
- What were the costs/benefits (social, environmental, economic) inherent to the informal system?
- To what actor groups and at what scales were the costs of informality and the benefits of the formalization intended to accrue? How were they distributed among society?
- To what degree was the formalization process effective?
- Did formalization prevent illegal and/or unsustainable use of common or private property?
- Did formalization increase public benefits (e.g. tax revenues, conservation of resources)?
- Was the process of formalization designed to safeguard the livelihoods/rights/safety of sectoral actors, and were actors livelihoods/rights/safety improved?
- Did formalization reduce corruption, including informal taxation all along the production chain? Or were corruption or informal payments reduced more in specific steps along the production chain? For what reasons?
- Did formalization reduce indebtedness of sectoral actors?
- Did formalisation foster the creation of collective action or social cohesion movements, such as Unions or Syndicates? What role did they play? Were they aimed at capturing rents from the sector? Or were such movements pre-existing and what role did they play in the formalisation process?
- Was the formalization achieved reversed, with a return to informal activities?
- What were the expected and unexpected costs of formalization, and who bore those costs?
- Did the national/local sector experience economic losses (e.g. sector no longer competitive/productive/diversified)?
- Were sectoral actor groups, including intermediaries, excluded or marginalized?
- Was sharing of benefits from the sector altered, e.g. favoring more powerful actors?
- Were any informal groups criminalized by the formalization process?
- Do any actor groups continue to function illegally/ has informal taxation increased?
- What lessons could the FLEGT Action Plan draw from this experience?
- E.g.: What is the role of external agencies in promoting and supporting formalization at the national scale? How much was the cost? Is permanent support needed?
Qualifications of researchers
For the cross-cutting cases, we anticipate that researchers will be Ph.D.s with examples of publications on informal land tenure/industrial production, on formalization of those sectors, or related topics. A number of disciplinary backgrounds are acceptable, including but not limited to economics, anthropology, sociology, or inter-disciplinary fields related to agriculture, forestry, natural resources, etc. The primary researcher may supervise a group of students to work on the topic, but will be responsible for the output.
For the sector-specific cases, we expect the researchers to be actively researching the informal sector, formalization, or the specific sector in question and be familiar with the country selected and fluent in the national language. The researchers may be Ph.D. students using this opportunity to develop an aspect of their research, in which case it is expected that the doctoral supervisor be well-suited to advise and orient the student.
Available resources for the project
A total of EUR 75,000 is available for this project. We will allocate EUR 18,000 to the production of each cross-cutting case, and EUR 13,000 to each geo/sector-specific case.
Responding to this call
Interested candidates will provide:
1) a short proposal, not to exceed 2-3 pages, responding to and elaborating on the general outline and terms of this TOR. The outline of the proposal is as follows:
- Short description of the case (s) to be researched and explanation of its relevance (1 pages maximum)
- Clarification of research questions to be addressed, taking into account the above outline, if necessary (1 page maximum)
- Explanation of proposed methodology (1/2 page maximum)
- Relevance of the proposed case to the broader research project (1/2 page page maximum)
2) In addition, a one-page budget for the appropriate amount (see above) must be provided including:
- Researcher stipends per time spent
- Field expenses
3) The CV of the researcher
4) Prior publications and/or evidence of enrollment in Ph.D. program and name of professor
Submission and Timeline
Please send all materials by email with the subject line proformal wp2 tor to: firstname.lastname@example.org
Deadline for responding to this TOR: Extended to September 30, 2011
Mid-project benchmark: Two brief reports by email after 4 months and 8 months on progress towards completion of the project. Partial funding will be disbursed following these interactions.
Deadline for completing the project: May 31, 2012.
Following receipt of all cases, we anticipate holding a meeting with the research group in which we will discuss findings and explore their relevance to the broader project.