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Field Challenge - Oaxaca

 This document provides an overview of the field project challenge for the Oaxacasite. The team of participants assigned to this project should review this briefing,read and investigate the key documents and research topics outlined in order to

maximise their impact on arrival at the site.

It is important to remember that the teamshould make contact with the client at an earlystage to understand the challenge more fullyand agree a way of working such thatquestions and clarifications can be answered ina timely manner. The group must ensure thatall team members (including the learningfacilitator and business sponsor) are fullybriefed in advance of the field event and havethe same level of understanding to ensure maximum impact on arrival.

Challenge:

Regional branding of forestry products for Oaxaca IndigenousCommunities

Location:

Four Indigenous communities at theSierra Norte, Oaxaca, Mexico:Comaltpec, Trinidad, Xiacuí andCapulalpam.

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Region:

Mexico is a megadiverse  country. Oaxaca is a southern Mexico State, which isespecially rich in cultural diversity, with 15 indigenous languages and many localvariants. This is believed to be one of the regions in world where agriculture wasfirst invented (Caran et al. 2006). It is also one of the areas within the Americancontinent of greatest human interference in the natural environment. Its cultural

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diversity and the different ways in which landscape was managed have madeOaxaca one of the richest biodiversity hotspots in Mexico. The Sierra Norte,located on the north part of Oaxaca is covered with different types of forests,including tropical rainforest, arid open forests and temperate pine-oak forests.Pine forests are the ones with highest commercial value in the region.

After many years of government’s ownership anduse of Oaxaca’s forests, local communitiesmanaged to regain control and tenure of their landand forests in a long and confrontational process.As a result, Mexico managed to develop one of themost progressive socio-environmental forestrypolicy approaches in the world (Chapela, 2005;Sunderlin et al, 2008).

Over the past 15 years local indigenous

communities have developed a sound forestmanagement system (Klooster, 2000). The communities in Sierra Norte havemanaged to organize themselves and set up a formal association: the Zapotecand Chinantec Communities’ Union (UZACHI - Unión de Comunidades Zapoteco-Chinantecas). Since 1995 communities’ forests managed by UZACHI have beencertified by the Smart Wood program which means they meet internationalsocial, environmental and economic standards. To receive and maintain thecertification, UZACHI has to go through a series of international technical auditsand follow guidelines set by the international Forest Stewardship Council.

Local context:

 The Sierra Norte or Benito Ramirez Juárez mountainrange is located two hours away from thecity of Oaxaca. The high altitude of the “Sierra Norte”provides the perfect climate for the growth of Pinus, atree widely used in the forestry industry speciallypulp and paper, furniture and civil construction. Thismountain ecosystem also hosts several other speciesand is considered a biodiversity “hot spot”, with manyendemic species, some of them under threat of 

extinction.

  The inhabitants of this region are nativeMexicans, descendants from two major ethnicgroups: the Zapotec and the Chinantec. Together theyown 25,000 ha of forest, entirely managed by a secularand sophisticated system in which decisions are madeby community members in a truly participativeprocess. The two indigenous groups are organised in 4 communities: San MateoCapulalpam, Santiago Comaltepec, La Trinidad and Santiago Xiacui.

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Each community controls and manages its own territory. The management of natural resources - wood mainly - as well as the provision of services like eco-tourism is done by Community Based Enterprises (CBE). Each one of the fourcommunities have its own forestry CBE whose main objective is to create jobs forcommunity members, contribute to community well-being, manage the forest in

a sustainable way, cut, process and sell the wood. CBE’s are managed bycommunity members even though some of them lack professional training andhave limited administrative experience. Managers are appointed by aCommunity Council and are expected to change or leave jobs every two years.

 This has an impact on the development and implementation of businessstrategies. In fact, by the time new managers begin to understand the marketand the business; they are relocated to other areas or other businesses withinthe community.

 This high turnover prevents mismanagement practices but also increasesinefficiencies drastically since new managers spend a lot of their time in trainingand learning about the business. This control mechanism is a cultural practice

that is unlikely to change in the short term. On the other hand, it makesmanagement more transparent as all managers are required to do a rendering of accounts before a community assembly on a regular basis. Even thoughcommunities are quite similar and explore the same natural resources (wood),each one sells their production independently and without any shared brandingor joint commercial efforts.

Profits made from selling wood, eco-tourism and other forest products areinvested in community’s projects, like building schools, health programmes orother projects prioritized by the community. There is still room to increase profitsfrom the forestry business but the main challenge is to improve the way thebusiness is being managed. This is the key obstacle preventing Communities’CBEs to increase their income from wood.

Project description

In 1989 the four communities jointly set up the “Union de ComunidadesProdutoras Forestales Zapoteca Chinanteca de la Sierra Juarez”, (Sierra Juarez’sZapoteca Chinanteca Union of Forestry Based Communities) or UZACHI.UZACHI’s main objective is to provide technical advice for the communities andassist them on how to better manage their forests and process the wood.UZACHI has a team of forest engineers and social workers who works withcommunity members from all 4 groups.

UZACHI’s continuous work has led to the certification of forest products by ForestStewardship Council, FSC (http://www.fsc.org/). FSC is a certificationbody internationally recognised by the forestry industry, which awardscertificates of good management to forestry and timber processing companieswho manage their forests according to pre-defined social, environmental andeconomical standards.

FSC certification is a costly process butusually investments pay off since themarket pays a spread for FSC products. In

many countries FSC certification is now arequirement for forest products imports, in

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a process similar to ISO 14.001 certification. Unfortunately the communities fromthe Sierra Norte aren’t bearing the commercial benefits expected from the FSCcertification. Local and regional wood markets in Oaxaca, where most of itsproduction is currently being sold don’t pay extra money for the FSC stamp andwood is traded according to standard market prices. To make things worse, there

is little evidence that there is a big market for FSC wood in Mexico at all. Itmeans that these communities are incurring in higher production costs (FSCcertified wood production certification costs are usually about US$5,000 peryear) without any additional commercial advantage up to date.

UZACHI ten year’s strategy plan recognises this problem. They are workingtowards integration of the four communities to go beyond technical cooperationand move towards joint commercialization through the development of aregional brand. They believe horizontal integration is the way forward and thatshould not only reduce costs and increase efficiency but also boost sales byaccessing markets that do recognise the value of FSC certification. Also, byselling their production together under a shared umbrella brand these

communities can access wholesales markets, something they cannot do on theirown given their low individual output. A common regional brand is alsoexpected to promote eco-tourism, an activity all communities have just begunto explore, but again in isolation.

Challenge

 The challenge posed for UZACHI’s communities is to increase the revenue fromcertified forest products by reaching markets that are willing to pay a spread for

their FSC certified wood. This means going beyond the regional (sub national)market and tapping into national and international buyers. A horizontalintegration approach is required to coordinate production output and salesstrategy, in particular product standards, price, marketing strategies andbranding.

A number of challenges are believed to be preventing the Sierra Nortecommunities from increasing their revenue from the exploration of timber:

 Management structure and integration: collective action amongstcommunities is happening just at the technical level. Although many businessopportunities have been lost, keeping several small administrative units has

proven to be an efficient way to avoid any mismanagement that may jeopardize the survival of UZACHI and the continued good forestmanagement. A review of management processes in each of the communityforest enterprises is required. Management processes need to bestandardized in order to minimize the effects of high turnover. Horizontalintegration among the 4 communities can bring efficiency levels up and havea direct impact on revenue. Nevertheless, this is a cultural process thatoperates on its own timing and needs to be considered accordingly.

Collective branding: the four Sierra Norte communities still haven’t gotany branding at all. Their forest products are FSC certified and could be sold

to niche markets. A branding process needs to take into account not just theproducts in itself but also the whole social context where these products are

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made. Consumer habits are increasingly being influenced by social attributesof products especially by international markets.

Access to market: new avenues for positioning their products need to beexplored. A market segmentation strategy based on research can provide a

sound way to identify partners in markets that haven't yet being contacted. The FSC wood is a worldwide recognised product especially in Europe, US and Japan. There is a need to identify the appropriate commercial partners whocan bridge this commercial gap.

Team project

 Your project is to assist the UZACHI to increase and enhance their revenue in asustainable way.Specifically you are requested to assist UZACHI to develop a collective brandingsystem that may help to access socially and environmentally aware nichemarkets. You will need to take into consideration that despite management

changes are necessary, the decentralized business model has proven to beeconomic and social resilient. You may want to consider the following:

   The creation of a branding that incorporates the values, beliefs andattributes of the Zapotec and Chinantec cultures

  Help UZACHI to access new and international markets for SustainableForestry products using the internet

  Development of a set of business guidelines, standards and measures thatwill improve the organisation of the production process of SustainableForestry products within the four UZACHI communities.

   The branding system may also leverage the communal tourism

businesses, and improve communities’ livelihoods by fostering ecotourismin their region.  Set up a framework to develop a business plan for the UZACHI branding

system.

Client

UZACHI is your primary client and many of the recommendationsmade by NGDP team will be incorporated into their ten yearsstrategy plan.

Communities

UZACHI was set up by 4 indigenous communities living in the Sierra Norteregion. Under the 1917 Mexican constitution, the federal and state governments

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officially recognized the ownership of territories by those indigenous groups andtraditional communities. After the approval of the Agrarian Act in 1982,communal lands were also recognized as common property, and fell under thesame environmental protection bill just as any other rural property. UZACHI’sgeneral assembly is responsible for making decisions about how the

communities will manage its natural resources as well as how profits will beinvested in the community. The council also promotes communal social benefitand supports production initiatives. The assembly grants plots to each family andlooks after the conservation of grazing lands, water bodies and forested areas inthe commons. Each community is officially represented in UZACHI’s council bytheir own commons council commissioner (comisariado de bienes comunales ).Assembly members are the President, a secretary and a treasurer with a 3-yearterm. The general assembly also appoints a surveillance council, which overseesthe commons council to assure that the Assembly agreements are fulfilled.

 The Four Communities

Comaltepec

 The name "Comaltepec" is a Nahuatl1 word meaning"Comal hill". "Comal" is the Nahuatl name for the dishused to cook tortilla, and "tepec" means "hill" or"mountain". Santiago Comaltepec is a Chinanteccommunity. It has 1,386 inhabitants and most of themspeak Chinantec (1,203). People make their livelihoodsfrom agriculture, gathering of forest products, coffee

growing and cattle ranching. Over the past few decades,most of the younger generation emigrated to the UnitedStated and now send remittances to their families.Comaltepec’s territory is about 12 km long with 16,000hectares in total, covered with rain forest, mesophyll forest, elfin forest, oak-pineforest and dry forest. Apart from agriculture and gathering of non timber forestproducts - activities which are undertaken by families - in 1985 the Comaltepeccommunity started up a community based forest enterprise (CBE), with a smallsawmill, trucks, winches and a tractor for road building and maintenance. Themain settlement is Santiago Comaltepec with secondary settlements spread overthe community territory named Soledad Tectitlán, La Esperanza y Zoyolapan.

Capulalpam

 The name "Capulalpam" comes from the Nahuatl name for the Capulín tree(Prunus capuli ). So Capulalpam means “the land of capulín”. San Mateo Capulalpam is a Zapoteccommunity with 1,313 inhabitants and very few of them speak Zapotec (89). Main sources of income are

1 Nahuatl is a group of related languages and dialects of the Nahuan (traditionally called

"Aztecan") branch of the Uto-Aztecan language family. Collectively they are spoken by anestimated 1.5 million Nahua people, most of whom live in Central Mexico. All Nahuan

languages are indigenous to Mesoamerica.

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provided by jobs in a local mine, forestry and agriculture. Similarly toComaltepec, Capulalpam also faces challenges related to younger generationmoving to the US. And just like their neighbours, they too have started aCommunity Based Forest Enterprise in 1985, to extract and process roundwood. Capulalpam people are very proud of their culture and have created a

Centre of Traditional Indigenous Medicine (OMJSJO - Organización de MédicosIndígenas de la Sierra Juarez de Oaxaca). The organization’s main aim is topreserve the traditional medicinal knowledge of the indigenous population sinceit is an integral part of their history and culture. The indigenous medicine isbased on locals' knowledge of plants, its healing properties and inner balance of energies.

Xiacuí 

"Xiacuí" is a Zapotec name meaning “the hill wherethe hawk sings”. Is comes from "xia"= hill and "Cui":hawk. Santiago Xiacuí is a Zapotec community. It has1,681 inhabitants and only few of them (134) speak

Zapotec. Community members make their incomemainly from jobs in a local mine, forestry andagriculture. Community’s land is about 6 kilometreslong, in a total of 5,000 hectares covered with oak-pine forest and dry forest. The Xacui communitystarted up their forestry CBE in 1987 in a processsimilar to the surrounding communities. The mainsettlement is Santiago Xiacuí with a secondarysettlement named "Francisco Madero"

La Trinidad

La Trinidad is the Spanish name for Christian’strinity: the father, the son and the Holy Spirit,what exemplifies Spanish influence on localculture and traditions. La Trinidad is a Zapoteccommunity with 724 inhabitants and only a few of them still speak Zapotec. Income and livelihoodscome from carpentry, forestry and agriculture. Thecommunity’s main settlement is located nearbythe town of Xiacuí, 2,360 meters over sea level. Its

territory is about 3 kilometres long, and extendsover 1,000 hectares covered with oak-pine forest.

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La Trinidad started up their CBE in 1987 to extract round wood also with verylimited resources.

Other stakeholders

 

Estudios Rurales y Asesoría (ERA) – A Mexican NGO that gives technicalsupport to local communities. ERA trained UZACHI staff and gave themtechnical support to build up its forest management strategy http://era mx.org (Spanish)

  Mexican Council for Sustainable Forestry http://www.ccmss.org.mx/ (Spanish)

  Oaxaca wood retail shops

  Rain Forest Alliance Smartwood program http://www.rainforest alliance.org/forestry 

   The Nature Conservancy – international NGO promoting natureconservation (www.tnc.org)

  Conservation International international NGO promoting FSC woodmarkets in Mexico and internationally (www.conservation.org)

  National Forestry Commission: government agency responsible for thepromotion of community forestry and is currently implementing a projectto increase management capacity and enhance coordination amongstcommunity based forest enterprises http://www.conafor.gob.mx/ (Spanish)

Deliverable

At the end of the field project you will be required tofacilitate a handover session with the client. Thepurpose of this session is to share the team resultsand recommendations with the client in a way thatallows for open discussion and agreement on anynext steps. The nature of this session will dependupon your actions and recommendations and maytake the form of the following:

1Facilitated discussion2Demonstration3Presentation

 You will need for your client and any relevantstakeholders to attend this session so that an agreement can be reached on thenext steps.

The handover session should be designed to achieve the following:12Agreement on the final product and delivery dates

3Agreement on next steps with the client and key stakeholders

4Discuss and agree how the client will implement these next steps5Ensure that all parties understand and are clear on their role going forward

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6 You will then need to support this handover process with a report written in plainEnglish. This report will be used by the client as the basis for futureorganisational development and will be completed after the handover meeting.

 Your team should decide the content, length and final format of this document

ensuring that it covers the requirements set out above. It is critical that yourclient fully understands your recommendations and is provided advice andguidance on the implementation. You are requested to remember your audience– your client will not be able to act on your recommendations if they do notunderstand or do not know how to implement them.

Research topics

1Management of Community Based Enterprises (CBE’s) –

1What are CBEs?

2How does its organisation differ from a Small or Medium Enterprise (SME)?

3What are the best practices in managing CBEs?4What are Community Based Forestry Enterprises?

2Indigenous groups in the Sierra Norte Region and in Mexico ingeneral

1What are the different cultures and values of these groups?2What are the issues facing these groups? (e.g. different ways to access and uselocal natural resources, education and health, income generating opportunities)

1Local and international marketing opportunities for FSC CertifiedWood

3What mechanisms exist for effective local and international marketing of theseproducts?4How might we help to sell more?5What are the existing channels for selling FSC Wood?6How can you leverage your own home market experiences to assist the client?

Supporting documents

UZACHI’s ten year’s strategy plan:

 http://era-mx.org/accion/plestrUZACHI.html (in Spanish)

Chapela, F.: Indigenous Community Forest Management in the Sierra Juárez,Oaxaca, in: Bray, D. Merino-Pérez, L and Barry, D.  , editors: The communityforests of Mexico: managing for sustainable landscapes. Austin, University of 

 Texas Press, 2005

Fernandini, C.: Harnessing Exports with Collective Brands. http://www.livinginperu.com/blogs/business/133

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Klooster, D. 2000. "Towards Adaptive Community Forest Management:Integrating Local Forest Knowledge with Scientific Forestry." Presented at"Constituting the Commons: Crafting Sustainable Commons in the NewMillennium," the Eighth Conference of the IASCP

Peskett,L. Luttrell, C. and Brown, D. making voluntary carbon markets workbetter for the poor: the case of forestry offsets . ODI Forestry Briefing 11, 2006

Rainforest Alliance: Sustainable Forestry

Rainforest Alliance: Certified Forestry Operation Summary for the Unión deComunidades Productoras Forestales Zapotecas-Chinantecas de la Sierra de

 Juárez de R.I. (SW-FM/COC-000011)

Sunderlin, W. Hatcher, J. Liddle, M: From Exclusion to Ownership? Challenges andOpportunities in Advancing Forest Tenure Reform. Washington, DC, Rights andResources Initiative. 2008.

Warner, M.; Hinrichs, C.; Schneyer, J. and Joyce, L. 2004. Sustaining the RuralLandscape by Building Community Social Capital. University of Cornell,Community and Rural Development Initiative.

White, A. and Martin, A. 2002. Who owns the world’s forests?. Washington, D.C.Forests Trends / Center for International Environmental Law.