Compensatory Afforestation Fund Act, 2016

In August this year, the Compensatory Afforestation Fund Act, 2016 has come into force. This act provides for setting up Compensatory Afforestation Fund Management and Planning Authority (CAMPA) at both central and state level to ensure expeditious and transparent utilization of amounts realised in lieu of forest land diverted for non-forest purpose. The utilization of funds is expected to mitigate the impact of diversion of such forest land. We have already covered this topic in our documents, here is a more details analysis of the same.

Background

Due to the continuous diversion of forests at the rate of about 20,000-25,000 hectares per year (according to the Ministry of Environment and Forests), a large sum of money is being accumulated by the government. At present, more than Rs 40,000 crore has been realized and it is increasing at the rate of about Rs 6,000 crore every year. So, to manage this money, and to utilize it for the designated purposes the CAMPA is proposed to be set up. The compensatory afforestation money and NPV (Net Present Value) collected from the user agency by the state government has to be deposited with the central government. The money will be eventually released to the state for compensatory afforestation or related works.

Understanding CAMPA funds

Levies are imposed on development projects that seek land inside a Reserved Forest or a Protected Area (PA) in a sanctuary or a national park. These collected levies are accrued in the CAMPA Funds which are to be utilised to plant trees elsewhere in order to ostensibly compensate the loss of forest due to development projects. Adhoc CAMPA was created on the order of the Supreme Court in October 2002. The Ad-hoc CAMPA decides the procedure of per-verification of credits of levies in the State-wise accounts.

The Forest (Conservation) Act of 1980 governs diversion or use of forest land for non-forest purposes such as industrial or developmental projects. Since forests are an important natural resource and provides us with a variety of ecological services, the Forest (Conservation) Act of 1980 mandates that non-forest land, equal to the size of the forest being diverted be afforested. But, since afforested land cannot become a forest overnight, loss of goods and services like timber, bamboo, fuelwood, carbon sequestration, soil conservation, water recharge, and seed dispersal are still experienced. Moreover, the newly afforested land will take around 50 years to start delivering the comparable goods and services which the diverted land gave just before diversion. To compensate the losses suffered in the interim, the Net Present Value (NPV) of the diverted forest are computed for a period of 50 years, and recovered from the “user agency” that is diverting the forests. The NPV for every patch of forest is computed by an expert committee. At present, the NPV value varies depending upon the quality of forests. It ranges from Rs 4.38 lakh per hectare for low quality forests to Rs 10.43 lakh per hectare for very dense forests. An expert committee has recently recommended increasing it to Rs 5.65 lakh and Rs 55.55 lakh for poor quality and very dense forests respectively.

The afforestation work which needs to be done by the user agencies (more often private agencies) has to be done by the state government instead of that user agency. But the entire expenditure incurred on the process including the purchase of land has to be borne by the user agency. Subsequently, the state government needs to transfer this new forest to the forest department for maintenance and management.

Thus, any user agency which wishes to divert forest land for non-forest purposes has to deposit money for NPV as well as for the compensatory afforestation by the state government. Apart from them a few other charges are also need to be paid by the agency.

For what purposes the CAMPA funds can be used?

As per the act, the CAMPA funds can be used for the following purposes:

• Artificial regeneration (plantation)
• Assisted natural regeneration
• Forest management
• Forest protection
• Infrastructure development
• Wildlife protection and management
• Supply of wood
• Other forest produces saving devices.

Adhoc-CAMPA

A temporary structure of CAMPA is already functioning on the orders of the Supreme Court. In 2002, the Supreme Court of India observed that collected funds for afforestation were under-utilized by the states and it directed that an “ad hoc CAMPA” consisting of three officials and one representative of the Central Empowered Committee be set up till the final one is created. Initially, the ad-hoc body was not allowed to disburse money to the states. In 2009, because of continuing delay in instituting the final CAMPA, the Supreme Court allowed the ad hoc body to release Rs 1,000 crore per year to states for the next 5 years. In 2014, the Supreme Court also allowed the States to set up State CAMPAs that receive 10% of funds form National CAMPA to use for afforestation and forest conservation. However, in 2013, a CAG report identified that the funds continued to be underutilized.

Salient features of the Act

• It seeks to establish the National Compensatory Afforestation Fund under the Public Account of India, and a State Compensatory Afforestation Fund under the Public Account of each state.
• The payments into the funds include compensatory afforestation, NPV, and any project specific payments. The National Fund will get 10% of funds collected and the remaining 90% will go to respective State Fund.
• The collected funds will be utilised for afforestation, regeneration of forest ecosystem, wild life protection and infrastructure development.
• The act also seeks to establish National and State Compensatory Afforestation Fund Management and Planning Authorities to manage the funds.
• The determination of NPV will be delegated to an expert committee constituted by the central government.
• NPV quantifies the services provided by the forest. It includes goods and services (tourism and timber); regulating services (climate change); and none-material benefits (recreation).
• It seeks to provide safety, security and transparency in utilization of CAMPA funds which are currently kept in Nationalized Banks and managed by an ad-hoc body. These funds would be brought under the focus of Parliament and State Legislatures by transferring them to non-lapsable interest bearing funds.

Pros

• The act will ensure the utilization of approximately Rs 40,000 crore rupees available with the Ad-hoc CAMPA for afforestation, regeneration of forest, infrastructure development and protection of wild life.
• The impact generated by the diversion of forests will get reduced.
• The youth belonging to the backward tribal areas would get employment opportunities.
• It will result in increase of green cover and creation of productive assets.

Challenges and criticism

The main difficulty in implementation is the availability of non-forest land for afforestation. As per the law, the chosen land needs to be preferably contiguous to the forest being diverted so that it will become easier for forest officials to manage it. But in case of non-availability of land near to the forest being diverted, land in any other part of the state can be used for the purpose. In case suitable non-forest land cannot be found, then the degraded forests can be chosen for afforestation, but in such cases, twice the area of diverted forest has to be brought under afforestation. Although the law provides flexibility in choosing the forest lands, still difficulty is faced especially in smaller states and heavily forested states like Chhattisgarh to find non-forest lands for afforestation.

Secondly, although the fund was envisaged to be used for compensatory afforestation, the Compensatory Afforestation Fund Act has expanded its scope of use to include general afforestation programme run through the Green India Mission, forest protection, forest management, forest and wildlife related infrastructure development, wildlife conservation, and relocation of people from protected wildlife areas. Critics argue that the diversion of funds for other activities would take away the focus from the prime objective of compensating for the forest cover lost to developmental or industrial development.

Thirdly, the act ignores the provisions of Forest Rights Act, 2006. The act will establish central and state authorities to spend CAMPA funds with little democratization or accountability. Role of gram sabha is important as per the Forest Rights Act. The act is framed in such a way that it will have adverse consequences for the hard-won rights of tribals and forest dwellers. For instance, as per the act the forest bureaucracy can unilaterally decide how the CAMPA funds will be spent. As a token gesture, only one tribal expert/tribal representative will be present in the CAMPA authority. As per a 2013 CAG report, the forest regulatory and executive structure neither possess the capacity nor the knowledge base to effectively administer the CAMPA.

Fourthly, the provisions of the act are against the principles of democratic devolution as laid down in the 73^rd and 74^th constitutional amendments.

Fifthly, the act ignores the recommendations of the Kanchan Chopra Committee and the Indian Institute of Forest Management Committee on NPV and also the recommendations to share the compensation with the forest dwelling communities. Kanchan Chopra committee calls for the revision of NPV every five years.

Sixthly, the act will lead to ecologically counter-productive outcomes. It promotes cutting of natural vegetation and has not provided any checks to monitor the malpractices of the bureaucracy. In some cases, it has been observed that the forest officials are choosing those lands already covered with dense natural vegetation for compensatory afforestation. This has been acknowledged by the environment ministry itself. It has been found that over 1000 hectares of land for compensatory afforestation has been already covered with dense forests.

Lastly, critics consider the Compensatory Afforestation money as “blood money” as it is tied to the diversion of original forests. Environmental concerns are sacrificed for developmental projects.

Way forward

• The act should ensure that there exists no conflict at the grassroots level. CAMPA should be implemented in such a way that it paves way for empowerment and participation of rural citizens.
• India can emulate China which has handed over 100 million hectares of forests to communities and households. Also, the Chinese government has invested over $50 action to encourage forest dwelling communities to conserve forests.
• It should be amended in synchronization with the provisions of the Forest Rights Act, 2006.
• National Highway Authority of India (NHAI) has suggested that the CAMPA funds could be used for mitigation of wildlife deaths on roads by creating underpasses and by-passes for animals.
• Infrastructure development is the most controversial purpose for which the CAMPA funds are used. In many cases, under the name of infrastructure development, the funds have been misused for administrative and non-budgeted tasks. Instead, CAMPA funds can be used for securing the existing natural tracks, make forests contiguous, safeguarding habitat and providing fair compensation to the local stakeholders.
• Wildlife impact assessment has to be conducted over the kind of infrastructure the CAMPA money has created.

Conclusion

It should be taken care that the CAMPA funds should not be wasted by the bureaucrats with little accountability. With little democratization the act will have adverse consequences for the hard won rights of tribal and forest dwelling communities.