Cooperativa Carmelita R.L.

Case Study from Petén, Guatemala

Dietmar Stoian & Aldo RodasCATIE-CeCoEco

CFEs in Tropical Forest Countries, ITTO, Forest Trends and RRI

History of the Enterprise

Emergence of the Enterprise

• in response to the changes in the political and legal framework for forest use in the Peten

• opportunities provided through forest concession process in the multiple use zone of the Maya Biosphere Reserve at the end of the 1990s

• in 1996, the community Carmelita establishes the Committee for the Development of Carmelita

• concession of 53,797.9 ha awarded in 1996 • forest utilization initiates in 1997 on 100 ha• in 1998, the committee becomes formalized as Cooperativa Carmelita Ltd.

• FSC certification obtained in 1999• sawmilling initiates in 2001 (rented equipment)• own processing plant since 2004• FSC recertified in 2004 (including xate)

Organizational Structure (1)

Leadership

• Operations manager oversees 4 commissions (marketing, forest protection, credit, education)

Structure and Governance

• General Assembly (GA): all members entitled to vote on major decisions and elect BoD

• Board of Directors (BoD): president, vice-president, secretary, treasurer, and three other members coordinate with and guide manager

• Operations manager: initially from within the cooperative; now hired from outside (ex-administrator of Arbol Verde)

• First tier association (member of FORESCOM)Membership and size

• 127 members (♂: 56% vrs. ♀: 44%), mainly mestizos

Organizational Structure (2)

Decision-making structure

•Manager consults with president of BoD for major decisions; BoD reports to general assembly

• As concessionaire also needs to report to National Council of Protected Areas (CONAP)

• Legal constitution: Cooperative with limited liability (Cooperativa R.L.); 25-year community concession (renewable)

•Membership of FORESCOM: second-tier community forest enterprise with 11 first-tier CFEs

• Contract with local private industry through FORESCOM for milling of lesser-known species

Organizational chart

General Assembly

Board of Directors

Operations Manager

EducationCommission

FORESCOMrepresentation

CreditCommission

MarketingCommission

Forest ProtectionCommission

ExternalAuditing

VigilanceCommissionExternal

ChicleXateTimber Tourism

Location of forest concession in the MBR

Economics of the Enterprise (1)

Forest Area

• Concession of 53,797.9 ha: 20,400 ha for timber extraction and 32,005 ha for NTFP extraction

Principal timber products (1997-2006)

• Mahogany: 6186 m³ (63.1%)• Manchiche: 1690 m³ (17.2%)• Tropical cedar: 1017 m³ (10.4%)• Pucté: 456 m³ (4.7%)• Amapola: 209 m³ (2.1%)• Santa María: 207 m³ (2.1%)

Principal non-timber forest products (NTFP)

• Camedor palm or xate (Chamaedorea spp.)• Gum or chicle (Manilkara zapota)• Allspice or pimienta (Pimenta dioica)

Economics of the Enterprise (2)

Production Figures, 1997-2006

Year Annually allowable cut (ha)

Extracted volume (m³)

Density of extraction (m³/ha)

Allowed Extracted Allowed Extracted

1997 100 427.01 434.11 4.27 4.34

1998 400 363.57 449.52 .91 1.12

1999 432 1,091.65 848.99 2.53 1.97

2000 423 962.40 1,201.27 2.28 2.84

2001 450 1,463.31 969.67 3.25 2.15

2002 402 1,646.00 1,478.29 4.09 3.70

2003 500 1,367.67 1,324.50 2.74 2.65

2004 500 1,364.94 1,522.46 2.73 3.04

2005 272 989.90 790.69 3.64 2.91

2006* 316 1,270.23 771.55 4.02 2.44

Total 3,795 10,946.68 9,800.05 2.88 2.58

* Preliminary data Source: CONAP, Forest Department

Economics of the Enterprise (3)

Sales

• 1997-1998: on the stock sales to local industry

• 1999-2000: sales of flitch (logs sliced with chainsaw) to local industry (Baren Comercial)

• 2001-2003: contraction of milling services from local industry; sales to Unites States (Rex Lumber Company) and UK (John Boddy Timber Ltd)

• Since 2004: sawmilling in own processing plant; sales of lesser-known species (Rex Lumber Company) and 50% of mahogany (Gibson Guitars) through FORESCOM

Economics of the Enterprise (4)

Sales

• Sales contracts for mahogany and tropical cedar (processed by cooperative) with companies in the United States and Europe

• Typically sells certified mahogany at US$ 0.10-0.15/m³ above the average price fetched by the community concessions (bargaining power)

• 1st quality sawn wood of certified mahogany fetches highest price: up from US$ 742/m³ in 1997 to US$ 1,781/m³ in 2006

• Lesser-known species (2-3/year out of a total of 9) principally sold in domestic or Mexican market: prices vary largely (US$220-500/m³)

• Recent advances in sales of LKS (manchiche, santa maría and pucté) processed by local private industry and sold through FORESCOM or independently (US$382-530/m³)

Economics of the Enterprise (5)

Employment

• 25-30 persons in timber extraction (January-February/March)

• 50-60 persons in NTFP extraction (seasonal)

• 30-35 persons in sawmilling of precious woods (mahogany, tropical cedar) (March-May)

• Sawmilling services provided to other CFE (La Colorada)

• Small carpentry operated from 2002 to 2004; to be reopened if funds for machinery are secured

• Full-time employment of operations manager

• Part-time employment of forest resourcemanager and other support staff

Economics of the Enterprise (6)

Technical Professionals

• ACOFOP instrumental for community organization and progress in certification process

• Initially technical assistance by various NGO (e.g., Alianza para un Mundo Justo, ProPeten) and projects (BIOFOR/USAID)

• Further support through ACOFOP, INACOP, University of San Carlos, Rainforest Alliance, and CONAP

• Legal representative in charge of administration• Resource manager (regente forestal) oversees logging operations

• Operations manager hired in 2005 from outside the community (ex-manager of Árbol Verde)

Economics of the Enterprise (7)

Profitability of different product lines

• Processing of mahogany and tropical cedar profitable

• Processing of lesser-known species probably not profitable (exact cost analysis pending)

• Average cost of sawmilling (precious woods): US$ 230/m³

• Certification is mandatory in multiple use zone of the Maya Biosphere Reserve

• Certification imposes additional costs but brings about benefits for the commercialization of mahogany, tropical cedar, manchiche, santamaría and pucté

• Recertification obtained in 2005, independent from group certification offered by FORESCOM

Internal and External Barriers (1)

Market Barriers

• Demand for precious woods (mahogany, tropical cedar) outstrips local supply

• Difficulties to market lesser-known species profitably (though recent advances with manchiche, santa maría and pucté)

• Certification helps market precious woods, but less so lesser-known species

Internal and External Barriers (2)

Internal Barriers

• Limited technical and managerial capacities

• Planning deficient (no strategic or business plan), but recent advances with mid-term plan (2005-2007) and long-term plan (2008-2012)

• Blend between social organization and enterprise

• Changes in board of directors lead to discontinued development processes

• Employment effect limited to a relatively small number of members; mostly part-time and/or seasonal employment

• Stricter market orientation required for local production of sawn wood

Internal and External Barriers (3)

Regulatory Barriers

• No land titles, only usufruct rights

• Concession period 25 years (though renewable)

• Mandatory certification (but perceived positive; recertified in 2005)

• CONAP as governmental agency with a strong say on what happens in the multiple use zone of the MBR (though also providing certain services)

• Illegal logging causes unfair competition (lacking law enforcement)

Non-financial Benefit Streams (1)

Social Benefits

• Targeted to use 40% of utilities as working capital for the following year; 30% for education, health and social work; remaining 30% to be distributed directly among members

• Community organization• Women participation• Improvements in health and education• Capacity building• Infrastructure development and service provision • Employment and income generation

Environmental Benefits

• Less incidence of forest fires• Generally better conservation of forest resources

Non-financial Benefit Streams (2)

Important Trends

• Link with second-tier organization (FORESCOM) for resource manager scheme, marketing and other services

• Product diversification: three LKS (manchiche, santa maría, pucté) and NTFPs (xate, chicle, allspice)

• FORESCOM about to initiate own processing facilities for lesser-known species (primarily manchiche, santa maría and pucté)

• Carmelita seeks to offer sawmilling services to other community forest enterprises (Cruce a la Colorada, La Colorada, La Pasadita)

• Ecotourism development around archaeological sites (starting point for visits to park El Mirador)