IJERD – International Journal of Environmental and Rural Development (2012) 3-1

Research article
erd

Payment for Environmental Services (PES): Case Study onConservation Agreement on Forest and Biodiversity
Conservation in Central Cardamom Protected Forest,
Thmar Baing District, Koh Kong Province
LYNA KHAN*
Royal University of Agriculture, Phnom Penh, Cambodia
Email: khanlyna@gmail.com
Received 19 December 2011

Accepted 7 February 2012(*: Corresponding Author)

Abstract Cardamom mountain of Cambodia was classified as Burma’s hotspot ofbiodiversity by UNESCO in 2006. It includes watershed, air filtering and many othernatural resources such as timber and non-timber forest products (NTFPs), food, medicine
and construction materials. Forest has been severely degraded by chronic war and overexploitation of wood by concession companies. Conservation International (CI) has
collaborated with Royal Government of Cambodia (RGC) to reform forestry laws andestablish the Central Cardamom Protected Forest. Payment for Environmental Services(PES), which is an effective concept for biodiversity conservation. The win-win approachof PES mechanism provides benefit to all villagers in return for sustainable conservation.
For this reason, an overall goal of the research is to compare Conservation Agreement(CA) features and mechanisms of CI to those of PES. This research intends to describe CA
mechanism through PES periscope, analyze institutional design and explain institutionalarrangement as well as to indicate factors inducing changes in resident behaviour. This
study was conducted inside and around the protected zone of Central Cardamom Protected
Forest (CCPF) and it covers three communes of the district. Interviews were conducted onsite with the participation of 59 people, including farmers, authorities and NGOs in thestudy area. Besides, states and NGO officers involved in this research were informallyinterviewed. The results of this study showed that CA as a mechanism is similar to PES,
but it is not just PES due to its features. Although there are many features similar to PES
mechanism, it is totally a not voluntary transaction because villagers live in state forests,
so  they   don’t   have   a   legal   land  title.  They   don’t   have   a right to manage the state forests
which are controlled by forestry laws. On the other hand, CA design lacks institutionalinteraction between involved institutions so it is not legally recognized. All changes inlocal behaviours may be caused by the restriction imposed by the forestry laws and aids
for community development that stop land encroachment. Conservation Agreement
enhances the community development and alleviates poverty of local settlers inside andaround CCPF by providing development training and incentives such as establishingmicrocredit, NTFPs processing and providing agriculture instruments. Overall
Conservation Agreement is not pure PES but has affected participatory conservation andpoverty alleviation.
Keywords: PES, conservation, incentive, conservation agreement, voluntaryINTRODUCTION
Ecosystem sustains human life by providing food and drinking water, maintaining stock ofcontinuously evolving genetic resources, preserving and regenerating soils, fixing nitrogen andcarbon, recycling nutrients, controlling floods, filtering pollutants, pollinating crops and more otherservices. The ecosystem is facing severe degradation caused by human activities in agricultureexpansion (FAO, 2007a). Ecosystem degradation in Cambodia is also severe due to overexploitation of timber by concession companies after civil war (USAID, 2001). CardamomⒸ ISERD

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Mountain was defined as Indo-Burma biodiversity hotspot by UNESCO in 2006 which consists ofhundreds of endangered plant and wildlife species. Many NGOs and state agencies which areworking in biodiversity conservation are concerned about biodiversity and ecosystem degradationin Cardamom Mountains (CI, 2009). Within this wide context, Conservation International (CI)
Cambodia has initiated the Conservation Agreement (CA) by paying for contribution to natural
sustainability in Cardamom Mountain area through formation of PES due to its framework andfeatures. Within this framework, a market-based mechanism, at least one service buyer, who is thebeneficiary, pays for environmental services to ecosystem service providers under conditions
specified in a contract facilitated by intermediate agents or intermediate buyers who are found as
states in many implements of PES in other countries of the world. Due to Forestry Reform since
2002, institutional arrangement and its interaction have contributed to accelerate CA and promote it
into a national level to be recognized by the states (CI, 2009). In addition, benefits from incentives lhelped to make large changes in land use practices and made the living of people better. This
research has made an overall attempt to define and explain the importance of institutions and their
institutional interactions in the design and performance of PES (Wunder, 2005) within three main
objectives: 1) To describe the CCPF Conservation agreements mechanism through the PES(indirect). 2) To analyse the institutional design and explain the current institutional arrangement(process of elaboration, factors explaining the current framework). 3) To identify the factors thatinduce changes by the practices of CAs on people (development) and on natural resources(conservation).
METHODOLOGY
Study Area: Selection of the study area was made after an exploratory trip in three communes(Thmar Dan Pouv, Russei Chrum and Tatai Leu). This study has been carried out within the scope,
objectives and availability of time for investigating the most crucial part of informative dataobtained from the target area in response to the main goal of this research.

Fig. 1 Map of study areas in CCPT
Source: CI (2009)

The study area covers three communes inside the buffer zone of Central Cardamom Forest
Protected, Thmar Baing district, Koh Kong Province. The three communes were chosen as thetarget area according to the implementation of  CI’s  Conservation Agreement, which is the core of
the present research objective and geographical and social diversity. The research areas are briefly
shown in Fig. 1 above.
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IJERD – International Journal of Environmental and Rural Development (2012) 3-1

The red line indicates boundary of CCPF which is classified as state forest and controlled by
FA in cooperation with CI. There are two target located outside the CCPF boundary and one
located inside the protected zone.
Sampling size and methods: The number of interviewees was defined based on real situation ofexploratory trip. Stratified sampling method was used as principle to define the number ofinterviewees, and then classified according to their involvement in social activities and knowledgeof Conservation Agreements. Commune chiefs met and were informed of the present research intheir commune boundaries and the objectives of the survey, and were asked for general information
regarding the commune and villages (demographic, social, and economic data). A random
sampling method for villagers was chosen due to the impossibility of preliminary stratificationaccording to a set of criteria. However, as long as we got to know the villagers in the area, we tried
to stratify the interviewees according to:- Age criteria – Farmers actively engaged in social life, agricultural practices, and active
household members in age groups of 20-40, 40-75- Period of stay in the commune – Villagers living in the community for a sufficiently long time,
both indigenous (born in the area) or migrants, as they were involved in the key events;- Occupation criteria - Resident teachers, village/commune policeman, among other activities, as
they are important beneficiaries according to the Conservation agreements. The design of sample
size has been changed several times to be flexible to the real situations on field and available tovillagers and other interview targets.
Eventually, 44 households, 8 community committee members and 7 commune councils orcommune chiefs have been interviewed as shown in Table 1.

Table 1 Number of ground respondents of research interview
Commune name

Totalinterviews

Villagers

Thmar Danpouv
Tatey Leu
Russey Chrum
Total

27
19135921131044

Village and commune
chiefs and/ ormembers of theircouncil
3317

Natural resource management
community committee members
3328

Besides on site interviews, many other states and NGOs officers involved in conservation of
the research area were interviewed to understand their views about agreement and to look for analternative approach in biodiversity conservation.
RESULTS
After many months of field study, results answer to objectives of this research in the study area.
The conservation agreement of CI has been designed with its own nature and criteria and thenimplemented by local people inside and around Central Cardamom Protected Forest. These results
also express the institutional arrangement and its interaction in the context of conservationagreement as well as the comparison to the mechanism of PES. Finally, factors that inducedchanges within and around the implementation of CA are also highlighted to elaborate the right
response to real local needs of community and help them get better off as well as to motivate them
to be voluntarily involved in biodiversity conservation.

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Design of Conservation Agreement
Conservation Agreement is a new approach of community engagement implemented byConservation International in order to earn trust and engage local people living in and around theCCPF in forest and wildlife conservation in a sustainable way, with balance between development
and conservation. The logic scheme of CA in Fig. 2 shows the typical logic of conservationagreement implemented by Conservation International in Cambodia at grassroots level and inassisting the ministry of agriculture forestry and fishery (MAFF) and Forestry Administration (FA)in CCPF management plans.

Fig. 2 Logic scheme design of agreement

Fig. 3 Level of Awareness in obligation and benefit of CAⒸ ISERD

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This logic framework of Conservation Agreement make local community cooperate withinconditionality in conservation for incentives. It makes them cultivate in a fix land and end shiftingagriculture which is similar to conditionality and additionality in PES (Muradian, Corbera, Pascual,
Kosoy, and May, 2009). In contrast, the majority of villagers seem to have very low competence onobligation and responsibility of CA because most of them have not clearly distinguished between
CA and forestry laws. Fig. 3 above shows the level of understanding in regulation and benefits ofCA.
Institutional design and interaction of conservation agreement
The institutional arrangement in an agreement context indicates that implementation of CA wasinitiated at grassroots level and quickly spread from commune to commune. The study found thatthe organization of this agreement has a good design at grassroots levels, where all local needs andsuggestion have clearly been recognized. However, it has never been implemented at a nationallevel due to the lack of technical works establishing cooperation between involved institutions,
identifying land use planning mapping, legal principles and so on. According to the results ofinterviews, involving stake holders on CA with local authorities, CI, FA and MoE show that there
is no clear legislation document supporting participatory land use planning (PLUP) of CA. On thecontrary, most of the villagers expect the so-called PLUP made by CI to be a legal process of landentitlement. The interviewing of local villagers shows low level of understanding around all theinstitutional design of CA. Another cause of poor design on conservation process could beinstitutional interaction between involved stakeholders.
Conservation opportunity cost and distribution:
Opportunity cost was established firstly on forest land conservation. Villagers promised to stop
land encroachment in return for some amount of money for commune development. Formula ofopportunity cost was made absolutely by CI. The calculating formula for forest opportunity cost is
OCF = FL x ARy x MP (OCF: Opportunity cost for forest, FL: Size of forest encroachment peryear (ha), ARy: Annual rice/crops yield from FL (Kg/ha), MP: crops market price ($/kg)). New
forms of conservations have been expanded every year after the end of CA contract which wasmade annually. The benefits provided by agreements can be divided into 2 categories:
Conservation package- a monetary sum that reflects the opportunity cost of the foregone activities
such as forest clearing for farming activities, wildlife hunting and trading; Conservation Agreement
Management and Monitoring costs- such as patrolling salary, administrative salary for NRMC
committee, patrolling equipment and first aid kits and individual incentives for confiscated snares
and animals. Decisions on spending the Conservation Package are made jointly by CI’s  CE  team  and NRMC members in consultation with villagers. The main part of the Conservation Package
benefits are provided in-kind, such as mechanical mules (hand tractors), spare parts (cart), etc.
DISCUSSION
This design of Conservation Agreements does not identify final ES beneficiaries. It is not abeneficiary- pay scheme. NGO stands as a donor- buyer, local populations as ES providers.
Payments are conditional to the performance of the obligations rather than to the provisionof ES. The conditionality criterion is weakly enforced and sacrificed to maintaining good relations
with local communities - working with people is more important, than applying the contracts to theletter. The survey with local people showed that they have realized that they were living in states
forest controlled by FA. Most of them experienced many huge conflicts with FA law enforcement
team over the past years. They are obligated to respect the forest law against land encroachment
and wild life hunting and trading. Most of the villagers still confuse CI and FA officers.
The   additional   value   of   CA’s   has   not   been   prioritized. Baselines on forest cover andwildlife populations do not exist. CI acknowledged this weak point of the program and is to launch
flagship  species’  population  monitoring  programs.  The  data  on  net  increase  of  the  forest  cover  or  a  Ⓒ ISERD40IJERD – International Journal of Environmental and Rural Development (2012) 3-1

flagship   species   population   could   be   obtained   from   other   sources,   but   these   evolutions   can’t   be  considered as agreement-contingent.
Agreements are not truly voluntary and seen as another beneficial NGO intervention. Local
populations  don’t  have  legal  rights  on  the  land  and  resource  use,  their  rights  are  restricted  by  law  and any intervention providing additional benefits is a priori welcome. The principle of“voluntariness”  is  ambiguously  perceived:  so  most  of  the  interviewees accepted that the agreements
are voluntary, which could be explained that it does not imply big changes in their livelihood
strategies,  that  it  is  not  “serious” enough, and that they don’t  care  if  it  exists  or  not.  
Opportunity costs are not based on market mechanism and represent amounts negotiatedbetween CI and the community. They have been negotiated once and have not been changed.
Due to The   scale   of   “opportunities’   loss”   is   yet small. Relatively lower population in theuplands, difficult access to the area makes that the demand for land is less than in the lowlands ofCambodia.   Indigenous   populations   don’t   perceive   yet   the   land   restrictions,   thus   land-use plans
introduced by Conservation agreements.
Agreements - instruments of diplomatic conciliation in the battle for law enforcement. CIstays   as   a   “conservation-oriented”   organization   and   the   primary   objective   is   to enforce theprotected zone management. Agreements in principle enforce the law, rather than represent theholistic voluntarily negotiated market transactions between resource beneficiaries and ES providers.
Field trips allowed understanding the local perception and revealing such problems as limitedsocial activeness, limited awareness on quid-pro-quo mechanism (Wunder, 2005) of theagreements,   unequal   access   to   benefits,   elite’s   capture,   and   governance   issues   specific   to   the  Cambodian   “patronage”   systems.   CI’s   Community   Engagement   actions   on   the   field   stay   quite  relevant in helping and to responding to the imminent development needs. Their initial design as ofa strong institution based on principles of civil society met limitation in the context. Nominally,
CA’s  are  based  on  a  wide  participatory  approach,  in  practice  for a successful implementation they
have to be negotiated respecting strict hierarchical order of the Khmer local governance. In-kindbenefits   from   CA’s   were   intended   to   promote   environmentally   improved   productive   sustainable  fixing agriculture. CE team worked with local communities to restore old paddy rice fields andgave mechanical mules and water buffaloes as means of plowing. This was with an aim to increase
crops yields and support the livelihoods. Basically, only those who have rice fields could
effectively use agriculture instrument, while others prefer traditional practices in their plots of land
(planting without plowing, hand plowing hoes, abandoning land for a fallow period, shiftingcultivation). Although it is not always possible, trend should be developed in supporting suchactivities as agro-forestry, ecotourism and developing local agricultural and NTFP markets. This
would provide people with good sources of additional income and their livelihoods would rely lesson subsistence agriculture and illegal activities. Few of environmental services provided are paid
depend on forest environmental service, wildlife species protection and dragon fish protection.
Rewards have been provided without any conditionality for conservation. For instance,
conservation package provided on dragon fish conservation was made without real baseline study
on the increasing number of dragon fish fingerling.
CONCLUSION
Overall, result and discussion have clearly distinguished CA agreement as PES based on its
features and mechanism. Anyway, CA has provided a crucial lead to PES implementation inCambodia in the future because it clearly contributes to poverty alleviation in context ofdevelopment and biodiversity conservation through an approach of environmental economics,
providing benefit for livelihood and community development through market-based mechanism.
Establishing a legal PLUP is the most important lead for land entitle which is crucial component of
PES in the future. Institutional interaction should be improved to provide a helpful process ofestablishing legal framework for natural resources conservation and community development.

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ACKNOWLEDGEMENTS
This research project was jointly conducted by Faculty of Agriculture Economic and RuralDevelopment (FAERD) a subset of Royal University of Agriculture (RUA) on  project  “Definition  of   Environmental   Services   Provided   by   Cambodian   Agriculture   in   form   of   Payments”.   RUA, as
well as the GIDAR Master Program was supported by the FSP project funded by the French
Government and the RUA. As well, we would thank to all partners who cooperated with theresearch.
REFERENCES
CI. 2009. The management plan of Central Cardamom protected forest for watershed protection andbiodiversity conservation 2010-2014. Phnom Penh Conservation International Cambodia.
FAO. 2007. The State of Food and Agriculture: Paying farmers for environmental services Vol. 38.
Muradian, R., Corbera, E., Pascual, U., Kosoy, N., and May, P.H. 2009. Reconciling theory and practice: Analternative conceptual framework for understanding payments for environmental services. EcologicalEconomics. Elsevier.
USAID. 2001. Cambodia Environmental Review: Status and Trends in Environmental Management andOptions for Future Action. Vermont 05401.
Wunder, S. 2005. Payment for Environmental Service: Somes nuts and bolts Vol. 42. Jakarta: Center forInternational Forestry Research (CIFOR), Indonesia.

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