Field Challenge - Oaxaca

This document provides an overview of the field project challenge for the Oaxaca
site. 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 team

should make contact with the client at an early
stage to understand the challenge more fully
and agree a way of working such that
questions and clarifications can be answered in
a timely manner. The group must ensure that
all team members (including the learning
facilitator and business sponsor) are fully
briefed in advance of the field event and have
the same level of understanding to ensure maximum impact on arrival.

Challenge:

Regional branding of forestry products for Oaxaca Indigenous

Communities

Location:

Four Indigenous communities at the

Sierra Norte, Oaxaca, Mexico:
Comaltpec, Trinidad, Xiacuí and
Capulalpam.

http://maps.google.co.uk/maps?

f=q&source=s_q&hl=en&geocode=&q=santiago+xiacui&sll=17.058449,-96.731
986&sspn=0.899309,1.235962&ie=UTF8&ll=17.292585,-96.434834&spn=0.224
546,0.30899&t=h&z=12

Region:

Mexico is a megadiverse country. Oaxaca is a southern Mexico State, which is

especially rich in cultural diversity, with 15 indigenous languages and many local
variants. This is believed to be one of the regions in world where agriculture was
first invented (Caran et al. 2006). It is also one of the areas within the American
continent of greatest human interference in the natural environment. Its cultural
diversity and the different ways in which landscape was managed have made
Oaxaca 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 and

use of Oaxaca’s forests, local communities
managed to regain control and tenure of their land
and forests in a long and confrontational process.
As a result, Mexico managed to develop one of the
most progressive socio-environmental forestry
policy approaches in the world (Chapela, 2005;
Sunderlin et al, 2008).

Over the past 15 years local indigenous

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

Local context:

The Sierra Norte or Benito Ramirez Juárez mountain

range is located two hours away from the
city of Oaxaca. The high altitude of the “Sierra Norte”
provides the perfect climate for the growth of Pinus, a
tree widely used in the forestry industry specially
pulp and paper, furniture and civil construction. This
mountain ecosystem also hosts several other species
and is considered a biodiversity “hot spot”, with many
endemic species, some of them under threat of
extinction.

The inhabitants of this region are native

Mexicans, descendants from two major ethnic
groups: the Zapotec and the Chinantec. Together they
own 25,000 ha of forest, entirely managed by a secular
and sophisticated system in which decisions are made
by community members in a truly participative
process. The two indigenous groups are organised in 4 communities: San Mateo
Capulalpam, Santiago Comaltepec, La Trinidad and Santiago Xiacui.
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 four
communities have its own forestry CBE whose main objective is to create jobs for
community members, contribute to community well-being, manage the forest in
a sustainable way, cut, process and sell the wood. CBE’s are managed by
community members even though some of them lack professional training and
have limited administrative experience. Managers are appointed by a
Community Council and are expected to change or leave jobs every two years.
This has an impact on the development and implementation of business
strategies. In fact, by the time new managers begin to understand the market
and the business; they are relocated to other areas or other businesses within
the community.

This high turnover prevents mismanagement practices but also increases

inefficiencies drastically since new managers spend a lot of their time in training
and 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 makes
management more transparent as all managers are required to do a rendering of
accounts before a community assembly on a regular basis. Even though
communities are quite similar and explore the same natural resources (wood),
each one sells their production independently and without any shared branding
or joint commercial efforts.

Profits made from selling wood, eco-tourism and other forest products are
invested in community’s projects, like building schools, health programmes or
other projects prioritized by the community. There is still room to increase profits
from the forestry business but the main challenge is to improve the way the
business 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 Comunidades

Produtoras Forestales Zapoteca Chinanteca de la Sierra Juarez”, (Sierra Juarez’s
Zapoteca Chinanteca Union of Forestry Based Communities) or UZACHI.
UZACHI’s main objective is to provide technical advice for the communities and
assist them on how to better manage their forests and process the wood.
UZACHI has a team of forest engineers and social workers who works with
community members from all 4 groups.

UZACHI’s continuous work has led to the certification of forest products by Forest
Stewardship Council, FSC (http://www.fsc.org/). FSC is a certification
body internationally recognised by the forestry industry, which awards
certificates of good management to forestry and timber processing companies
who manage their forests according to pre-defined social, environmental and
economical standards.

FSC certification is a costly process but

usually investments pay off since the
market pays a spread for FSC products. In
many countries FSC certification is now a
requirement for forest products imports, in
a process similar to ISO 14.001 certification. Unfortunately the communities from
the Sierra Norte aren’t bearing the commercial benefits expected from the FSC
certification. Local and regional wood markets in Oaxaca, where most of its
production is currently being sold don’t pay extra money for the FSC stamp and
wood 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. It
means that these communities are incurring in higher production costs (FSC
certified wood production certification costs are usually about US$5,000 per
year) without any additional commercial advantage up to date.

UZACHI ten year’s strategy plan recognises this problem. They are working
towards integration of the four communities to go beyond technical cooperation
and move towards joint commercialization through the development of a
regional brand. They believe horizontal integration is the way forward and that
should not only reduce costs and increase efficiency but also boost sales by
accessing markets that do recognise the value of FSC certification. Also, by
selling their production together under a shared umbrella brand these
communities can access wholesales markets, something they cannot do on their
own given their low individual output. A common regional brand is also
expected to promote eco-tourism, an activity all communities have just begun
to explore, but again in isolation.

Challenge

The challenge posed for UZACHI’s communities is to increase the revenue from
certified 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 horizontal
integration approach is required to coordinate production output and sales
strategy, in particular product standards, price, marketing strategies and
branding.

A number of challenges are believed to be preventing the Sierra Norte

communities from increasing their revenue from the exploration of timber:

Management structure and integration: collective action amongst

communities is happening just at the technical level. Although many business
opportunities 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 forest
management. A review of management processes in each of the community
forest enterprises is required. Management processes need to be
standardized in order to minimize the effects of high turnover. Horizontal
integration among the 4 communities can bring efficiency levels up and have
a direct impact on revenue. Nevertheless, this is a cultural process that
operates on its own timing and needs to be considered accordingly.

Collective branding: the four Sierra Norte communities still haven’t got
any 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 the
products in itself but also the whole social context where these products are
 made. Consumer habits are increasingly being influenced by social attributes
of products especially by international markets.

Access to market: new avenues for positioning their products need to be

explored. 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 who
can bridge this commercial gap.

Team project

Your project is to assist the UZACHI to increase and enhance their revenue in a
sustainable way.
Specifically you are requested to assist UZACHI to develop a collective branding
system that may help to access socially and environmentally aware niche
markets. You will need to take into consideration that despite management
changes are necessary, the decentralized business model has proven to be
economic and social resilient. You may want to consider the following:

 The creation of a branding that incorporates the values, beliefs and

attributes of the Zapotec and Chinantec cultures
 Help UZACHI to access new and international markets for Sustainable
Forestry products using the internet
 Development of a set of business guidelines, standards and measures that
will improve the organisation of the production process of Sustainable
Forestry products within the four UZACHI communities.
 The branding system may also leverage the communal tourism
businesses, and improve communities’ livelihoods by fostering ecotourism
in 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 recommendations

made by NGDP team will be incorporated into their ten years
strategy plan.

Communities

UZACHI was set up by 4 indigenous communities living in the Sierra Norte

region. Under the 1917 Mexican constitution, the federal and state governments
officially recognized the ownership of territories by those indigenous groups and
traditional communities. After the approval of the Agrarian Act in 1982,
communal lands were also recognized as common property, and fell under the
same environmental protection bill just as any other rural property. UZACHI’s
general assembly is responsible for making decisions about how the
communities will manage its natural resources as well as how profits will be
invested in the community. The council also promotes communal social benefit
and supports production initiatives. The assembly grants plots to each family and
looks after the conservation of grazing lands, water bodies and forested areas in
the commons. Each community is officially represented in UZACHI’s council by
their own commons council commissioner (comisariado de bienes comunales).
Assembly members are the President, a secretary and a treasurer with a 3-year
term. The general assembly also appoints a surveillance council, which oversees
the 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 dish
used to cook tortilla, and "tepec" means "hill" or
"mountain". Santiago Comaltepec is a Chinantec
community. It has 1,386 inhabitants and most of them
speak Chinantec (1,203). People make their livelihoods
from agriculture, gathering of forest products, coffee
growing and cattle ranching. Over the past few decades,
most of the younger generation emigrated to the United
Stated and now send remittances to their families.
Comaltepec’s territory is about 12 km long with 16,000
hectares in total, covered with rain forest, mesophyll forest, elfin forest, oak-pine
forest and dry forest. Apart from agriculture and gathering of non timber forest
products - activities which are undertaken by families - in 1985 the Comaltepec
community started up a community based forest enterprise (CBE), with a small
sawmill, trucks, winches and a tractor for road building and maintenance. The
main settlement is Santiago Comaltepec with secondary settlements spread over
the 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 Zapotec
community 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 an
estimated 1.5 million Nahua people, most of whom live in Central Mexico. All Nahuan
languages are indigenous to Mesoamerica.
provided by jobs in a local mine, forestry and agriculture. Similarly to
Comaltepec, Capulalpam also faces challenges related to younger generation
moving to the US. And just like their neighbours, they too have started a
Community Based Forest Enterprise in 1985, to extract and process round
wood. Capulalpam people are very proud of their culture and have created a
Centre of Traditional Indigenous Medicine (OMJSJO - Organización de Médicos
Indígenas de la Sierra Juarez de Oaxaca). The organization’s main aim is to
preserve the traditional medicinal knowledge of the indigenous population since
it is an integral part of their history and culture. The indigenous medicine is
based on locals' knowledge of plants, its healing properties and inner balance of
energies.

Xiacuí

"Xiacuí" is a Zapotec name meaning “the hill where

the hawk sings”. Is comes from "xia"= hill and "Cui":
hawk. Santiago Xiacuí is a Zapotec community. It has
1,681 inhabitants and only few of them (134) speak
Zapotec. Community members make their income
mainly from jobs in a local mine, forestry and
agriculture. Community’s land is about 6 kilometres
long, in a total of 5,000 hectares covered with oak-
pine forest and dry forest. The Xacui community
started up their forestry CBE in 1987 in a process
similar to the surrounding communities. The main
settlement is Santiago Xiacuí with a secondary
settlement named "Francisco Madero"

La Trinidad

La Trinidad is the Spanish name for Christian’s

trinity: the father, the son and the Holy Spirit,
what exemplifies Spanish influence on local
culture and traditions. La Trinidad is a Zapotec
community with 724 inhabitants and only a few of
them still speak Zapotec. Income and livelihoods
come from carpentry, forestry and agriculture. The
community’s main settlement is located nearby
the town of Xiacuí, 2,360 meters over sea level. Its
territory is about 3 kilometres long, and extends
over 1,000 hectares covered with oak-pine forest.
La Trinidad started up their CBE in 1987 to extract round wood also with very
limited resources.

Other stakeholders

 Estudios Rurales y Asesoría (ERA) – A Mexican NGO that gives technical

support to local communities. ERA trained UZACHI staff and gave them
technical 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.rainforestalliance.org/

forestry

 The Nature Conservancy – international NGO promoting nature

conservation (www.tnc.org)

 Conservation International international NGO promoting FSC wood

markets in Mexico and internationally (www.conservation.org)

 National Forestry Commission: government agency responsible for the

promotion of community forestry and is currently implementing a project
to increase management capacity and enhance coordination amongst
community based forest enterprises http://www.conafor.gob.mx/ (Spanish)

Deliverable

At the end of the field project you will be required to

facilitate a handover session with the client. The
purpose of this session is to share the team results
and recommendations with the client in a way that
allows for open discussion and agreement on any
next steps. The nature of this session will depend
upon your actions and recommendations and may
take the form of the following:
1Facilitated discussion
2Demonstration
3Presentation

You will need for your client and any relevant

stakeholders to attend this session so that an agreement can be reached on the
next steps.

The handover session should be designed to achieve the following:

1
2Agreement 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 steps
5Ensure that all parties understand and are clear on their role going forward
 6
You will then need to support this handover process with a report written in plain
English. This report will be used by the client as the basis for future
organisational 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 your
client fully understands your recommendations and is provided advice and
guidance on the implementation. You are requested to remember your audience
– your client will not be able to act on your recommendations if they do not
understand 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 in

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

1Local and international marketing opportunities for FSC Certified

Wood
3What mechanisms exist for effective local and international marketing of these
products?
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 community
forests 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
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 New
Millennium," the Eighth Conference of the IASCP

Peskett,L. Luttrell, C. and Brown, D. making voluntary carbon markets work

better 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 de

Comunidades 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 and

Opportunities in Advancing Forest Tenure Reform. Washington, DC, Rights and
Resources Initiative. 2008.

Warner, M.; Hinrichs, C.; Schneyer, J. and Joyce, L. 2004. Sustaining the Rural
Landscape 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.