IJERD – International Journal of Environmental and Rural Development (2013) 4-1

Research article
erd

A Feasibility Study on Payment for Forest Environmental
Services in Cambodia
NYDA CHHINH*Royal University of Phnom Penh, Phnom Penh, Cambodia
Email: chhinh.nyda@rupp.edu.kh

SOPHEAK KONG
Royal University of Phnom Penh, Phnom Penh, Cambodia
Received 13 December 2012

Accepted 30 January 2013(*Corresponding Author)

Abstract The study conducted a feasibility study on payment for forest environmental
services in Cambodia, combining quantitative and qualitative data sources. Literature
reviews and interviews were conducted to determine conditions required for payment forecosystem service success, and focus groups discussion and household surveys were
employed to capture villagers’   behaviors   in   forest   management   and   payment   for   forest  environmental services. Results showed that conditions required for PES success include
clear defined ecosystem services; flexible contracts and payments; transaction costs that do
not exceed potential benefits: a reliance on multiple sources of revenue deliveringsufficient and sustainable money; a close monitoring of compliance, land use change andprovision of ecosystem services; and the flexibility to improve effectiveness and efficiency
and adapt to changing condition. PES-like failures in Cambodia resulted from inequity of
benefit-sharing, a lack of management committee capacity to monitor participants andcarry out punitive measures, and the poor quality of services and communication skills.
Factors contributing to PES-like successes were simple and local program organization,
low administrative costs, transparency of benefit-sharing to services providers, and active
participation from villagers in complying with the regulations of programs. PFES could be
integrated into the REDD finance mechanism. As a result, the case study in Chambok
exemplified a community-based forest suitable for PFES implementation and possibly a
joint program. This would lead to improved livelihood conditions of local communities
through forest cover protection, and increase the awareness of downstream and upstream
villagers in ensuring the sustainable provision of services.
Keywords Cambodia, feasibility, forest management, livelihood improvement, PESINTRODUCTION
Commercial logging, shift cultivation, wood harvesting for woodfuel and charcoal production, andhabitat destruction by local villagers and in-migrants are the major driver to deforestation andforest degradation, and great threat to biodiversity. Government policies or incentives for forest
management are urgently needed to secure sustainable use of forest resources and improve local
livelihoods. In light of the failure of the command and control approach, payment for forest
environmental services (PFES) may be considered a potential solution. There are number ofsuccessful studies on payment for environmental services (PES) from both other countries andCambodia. In Costa Rica, environmental services (ES) is being bought through biodiversity
conservation, carbon sequestration, watershed protection, landscape beauty and bundled services(Alcamo et al., 2008). The payment was made to water services at about (USD 40-43/ha/yr),biodiversity (grant from CBD, UNFCCC, Global Environmental Facility, CI and other bodies),
Carbon sequestration (based on Certifiable Tradable Offset, CDM) and landscape (paid by hotel,
tourists and other users) (Pagiola, 2008). In Cambodia, there are three types of PES-Like ranging
from community based ecotourism, agri-environmental, and bird-nest protection programs.
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OBJECTIVES
The overall objective of this research is to conduct feasibility study on payment for forest
environmental services in Cambodia. The specific objectives of the study are to: (i) determine
condition required for PES successes, (ii) identify factors contributed to PES-Like successes andfailure in Cambodia, and (iii) conduct a feasibility study of PFES in Chambok area in Kampong
Speu Province, Cambodia.
METHODOLOGY
The research combined quantitative and qualitative data sources from two different levels, national
and local. For national level, existing literatures was reviewed for accessing of what condition tosecurely require PES success with the experiences from other countries. Key Informant Interview(KII) were also conducted for capturing their perception associated with the failures or successes of
PES-Like schemes in Cambodia in relation to the factors driving forces to deforestation anddegradation of forests. Six KIIs, who had experiences and worked closely related to PES in
Cambodia, were planned for interview (two from government and four from NGOs); but only five
KIIs were available for interview (one NGO was unavailable.) A fixed set of questionnaires wereused and responses were recorded and later transcribed. Chambok area located in Phnom Srouch
District, Kampong Speu Provinces was selected as the case study for identifying the perceptions
and behaviours of villagers associated with forest management. In this regards, for local level, twosmall samples of twenties households were surveyed – one sample from an upstream communityand one from downstream community. All households sampled make daily use of forest. The
household selection was systematically selected (one household surveyed, four households missed,
next household surveyed) and interviewed face to face with the complete set of questionnaires.
With the purpose to capture more in-depth information, FGDs were conducted to recover the root
causes of deforestation and understand the livelihood option and forest management behaviours ofvillagers. Two FGDs (one at the upstream and one at the downstream community) wereinterviewed in order to evaluate the understanding of these two stakeholder groups. Questionnaires,
recorders, and flip chart were used during discussion.
RESULTS AND DISCUSSION
Motivation of PES in Cambodia
From the forest resource point of view, PES appears necessary to ensure the forest coverage. The
constitution and forest law pave ways to sustainable use of forest while protected area policy
warranty the minimum forest coverage area. Forests in Cambodia fall under the general jurisdictionof the MAFF, with the FA charged as the responsible Government Authority (Forestry Law 2002,
Article 3), the MoE is responsible for Protected Areas (PA), and the FiA is responsible for flooded
forest and mangrove areas (Fisheries Law 2006, Article 3). Cambodian Law is hierarchical,
therefore all subsidiary regulations should respect to differentiation of responsibilities laid out in
the Forestry Law and other Laws. Even the law on PES is not legally regulated, the Royal
Government of Cambodia (RGC) has set numbers of policies to ensure forest coverage andsupported PES through REDD mechanism. For instance, the REDD project in Oddar Meanchey,
under the collaboration between the FA and PACT Cambodia through thirteen CF, used PES as amechanism for the distribution of benefits from the sale of carbon credits on the voluntary market(Chervier et al., 2010). About 7.1 million metric tons of carbon dioxides could be sequestered forover thirty years, while around 1,000 participated household were benefited (Poffenberger et al.,2008). The RGC has set policies to reform land administration and natural forest resource
management. The reform has focused on strengthening environmental protection and natural forest
resources through enhancing sustainable forest management, the use of forests to improve thelivelihoods of people, demarcated PA system to protect biodiversity and endangered species, andⒸ ISERD

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decentralized forest management through community forestry program. The use and extraction offorest products are carefully regulated through the delivery of permits, regulation of guideline formanagement, prohibited activities, and endorsement. The RGC also encouraged manmade
plantation substitute for national forest demands, and created public awareness to replant and usedcommunity  plantations  for  ﬁrewood  and  charcoal  needs.    
Condition Require PES Success
PES schemes tend to perform successful under the conditions clear and mutual agreement linking
land uses to the provision of ES (Mayrand and Paquin, 2004); clearly defined ecosystem services(Wunder et al., 2008); flexible contracts (Sommerville et al., 2009) and payments and transaction
costs do not exceed potential benefits; a reliance on multiple sources of revenues deliveringsufficient and sustainable money; a close monitoring of compliance, land use change and provisionof ecosystem services (Arriagada and Perrings, 2009; Landell-Mills and Porras, 2002); and theflexibility to improve effectiveness and efficiency and adapt to changing conditions (Sommervilleet al., 2009). The conditions require PES successes are also depended on the successful completionof a series of steps (Fig 1). First, potential service providers must enroll in the program, andsecondly service providers must comply with the terms of their contract. Third, compliance must
result in a change in land use compared to what would have happened without the program(Wunder et al., 2008). The development framework for successfully ES market consist of six steps(Landell-Mills and Porras, 2002): (1) Identify benefits provided by a specific service and bydetermination of forestry activities that deliver this services, (2) Undertake a feasibility study, (3)Establish willingness to pay, (4) Formalize property rights, (5) Establish payment mechanism andsupporting institutions, and (6) Undertake pilot activities and feedback to market design. In thisregards, the needs to provide training or capacity building to PES providers are required in order toincrease the attraction from buyers and their willingness to pay for ecosystem services.

Condition Require PES
Successes

Identify benefits provided by a specificservice and by determination of forestry
activities that deliver these services

Potential service providers
must enroll in the program

Undertake a feasibility study

Service providers mustcomply with the terms of
their contract

Establish willingness to pay
Formalize property rights

Compliance must result in achange in land use
compared to what would
have happened without the
programEstablish payment mechanism andsupporting institutions
Undertake pilot activities and feedback tomarket design

Fig. 1 Conditions require PES successes and framework for successful ES market
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The failures and successes of PES-Like in Cambodia
The opportunities costs for livelihood improvement between replanting and conserving forest to
gain benefits and choosing alternative option by converting land-use to grow other crops is the firstand foremost factors contribute to PES-Like failure in Cambodia. The benefits generated from
replanting and conserving forests take long time while the villagers would prefer direct benefits inshort time to support their daily consumption. Consequently, they would either not willing toparticipate in the program or participate but not respect to the rules and regulation. The second
failure is induced by inequity of benefits sharing and lacking of capacity of the management
committees to implement, monitor, and punish to those break the rules and regulations. Third isderived from poor quality of provided services and communication skills in particular with English
language communication. When the service buyers need guides or rangers, the local villagers
cannot afford to do so and even few can but not well. These would discourage service buyers tocome, and then automatically fail the program through income generation shortage. Factors
contributing to PES-like successes are simple and local program organization, low administrative
costs, transparency of benefit-sharing to services providers, and active participation from villagers
in complying with the regulations of programs. The simple locally arrangement with lessadministrative costs can disburse higher payments to individual villagers who provide the services.
The transparency in benefits sharing to all beneficiaries can avoid jealousness and conflicts throughoperational management. The levels of participation and involvement from villagers and theircommitments to comply with the rules and regulations are significant to retain program successes.
Herein, the needs to build local support and understanding of rules and regulation for protected
forests and land-use plans are also required to ensure the sustainable operation. The rules andregulation should notably be developed locally and approved by the entire village and themonitoring and evaluation should also be done continuously to check with the current statuses andthe changes of existing resources.
Case study of PFES in Chambok area
The Chambok area is located on the outskirts of the Kirirom National Park about 110 kilometers
west of Phnom Penh Capital via national road No. 4 in Chambok Commune, Phnom Srouch
District, Kampong Speu Province. Chambok Commune administers nine villages with a total
population of 546 families. The Chambok CBE is initially developed in 2001 by a local
environment organization Mlup Baitong, in cooperation with the MoE. Villagers in Chambok
commune are farmers and around 94% of the populations are involved in forest resource extraction
activities, including firewood and charcoal trading and collection of bamboo shoots, mushrooms,
traditional medicine, and rattan. This unsustainable harvesting of forest products is leading to therapid degradation of the forest resources both inside and outside the national park. The main
challenges are generating additional incomes to support their livelihood. Based on the below quotefrom farmer, the forest resources in Chambok area are being threatened and urgently needmanagement tool to address this problem.
I am a farmer, but my incomes cannot support my family a whole year. I have to log trees to get money.
I  log  the  trees  not  because  I  don’t  know  the  values  and  advantages of forests,
but because I have no other income generating opportunities.
Villager in Chambok Village, Chambok Commune,
Phnom Srouch District, KampongSpeu Province (Interview on 19th May 2012)

PFES may be considered as the potential solution to overcome this problem and provide
additional incomes to villagers. Chambok area is appeared to be potential area for piloting programof PFES in Cambodia. First, the protected area of 1,260 hectare of forestland inside Chambok area
can secure forest resources from illegal logging or invades from powerful outsiders. Moreover,inside the Chambok boundary, there are three CF and they have played important roles in forestⒸ ISERD

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management. The CF enables villagers to understand clearly and recognize the benefit andimportance of forest resources through closely involve them in forest resources management andprotection. Second, the land uses of CF in Chambok area can potentially provide a variety of ES
ranging from the regulation of hydrological flows, bird watching, waterfall beauty, and carbon
sequestration potential from bamboo. The hydrological flows of waterfall in the upstream of
Chambok generate clean drinking water to the downstream and are being bought by nine villages in
Chambok Commune with an average expend USD 0.25 per month per household. Bird watching
and waterfall beauty have considered as the most attractive ES to attract visitors to Chambok area.
Third, the villagers are paid for providing forest conservation services if and only if they comply
with the commonly-agreed conditions stipulated in contracts of the regulation on land-use plans,
non-hunting and non-forest logging.
There is no single approach to require PES successes from theoretical and practical reviewing
existing literatures. PES schemes are adapted to the very specific conditions under which they are
established and to the specific characteristics of markets for different ES. The three program of
PES-Like in Cambodia identified by (Clements et al., 2010) was successfully implemented basedon its own specific characteristics of market for different ES and locations. However, mostly ofthem were heavily depended on funding project from donors. Can the program be sustained when
the project was stopped funded? For sure, it could not be sustained without funds. So, the linkage
of investors to invest in the program might be the best to sustain the program because their business
operation are for making profits, and do so the program can get continuously support. Even thecase study in Chambok shows the characteristics and ES trading inside Chambok area has compliedwith the criteria for implementing PFES, the knowledge and understanding on forest managementof villagers are remained poor. The upstream villagers tend to easily change their behaviour
through converting land-use for agriculture or encroaching forest lands for commercial and making
woodfuel and charcoal. They are not critically enough to think in a longer time the negative
consequences of doing so. The downstream villagers are still not aware that the services they used
are being provided by upstream villagers, and its qualities could be changed in accordance to theland-use management behaviours of the upstream villagers. This means that the implementation
program of PFES in context of Cambodia is not successful if the program depends on only
downstream villagers to compensate to the upstream villagers.
CONCLUSION
The major driven of deforestation and forest degradation in Cambodia are caused by institutional
fragmentation, limited institutional and individual capacities, unclear of tenure, limited livelihood
options, and lack of law enforcement. These five factors have contributed to ineffective ofsustainable forest management even policy related to land and natural resource management wasreformed by the RGC. The successful experiences from previous PES-Like in Cambodia draw
lessons for the future development of program on PFES. This is particularly based on the livelihood
impacts of land use change activities and the challenges involving in transferring conditional
payment across actors and scales. The diversification of revenues for villagers involved in PES
schemes through the creation of new markets for environmental goods and services is the key forsuccess of PFES implementation. In doing so, the villagers will actively involve in the programwith respected to non-hunting rules and non-logging regulation and not to turn their land-use easily
for other purposes. So, the future implementation of PFES should be jointly carried out with REDD
program in order to extend financing from PFES. In this regards, Chambok area is one of thetypical community forestry among the others that suitable for applying PFES and possibly joint
program between PFES and REDD. The implementation of PFES program in Cambodia should be
driven under the theme of improving livelihood of local communities through forest protection andenhancing forest covers in the protected area. The raising awareness for downstream villagers (thefuture buyers) and upstream villagers should be provided for ensuring the sustainable provision ofservices. The needs to support from NGOs as mediator in buying ES or/and linking the program tobusiness and private enterprise is very importance to secure PFES successes.
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ACKNOWLEDGEMENTS
The research paper is made possible through many contributions. This paper is one of the outputs
from   the   a   research   project   “Evaluation   of   Pilot   Program   on   Payment   for   Forest   Environmental  Services  in  Vietnam  and  Policy  Implication  in  Lao  PDR  and  Cambodia”  jointly  implement  by  three  countries: Cambodia, the Lao PDR, and Vietnam by the Royal University of Phnom Penh, Hue
College of Economics from each country respectively. The authors are cordially pleased to thank to
Sumernet, Sida SWEDEN and CDKN for supporting fund in research activities. The authors also
express our sincere thanks to local institutions such as Ministry of Environment, Forestry
Administration, and local conservation NGOs such as WCS, FFI, CEPA where the research paper
obtained data.
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