Over the past fifty years, many of the world's forests have been destroyed or modified in ways that diminish their environmental and social contributions to human welfare, both present and future. While much of this trend has been driven by agricultural expansion, timber markets have also had serious impacts.

In general, markets for forest land and resources fail to account for the full social and environmental benefits that forests provide As a result, too much forest is converted to other land uses, while those forests retained for timber production may be harvested too often or too intensively, at the expense of biodiversity and other non-market, non-timber values. The problem has been exacerbated in recent years by increased private sector activity and control of forest resources. This has resulted from market liberalisation and the privatisation policies which have prevailed in many countries.

Many goods and services are required of forests, at various levels from the household to the global. The private sector is generally agreed to be effective at producing wood products for local, national and global markets. But what is its potential to contribute to- or to detract from - other goods and services? For example, how can the private sector assist in meeting local needs for non-timber forest products, recreation, firewood and grazing, and other livelihood requirements? How can it meet national needs for watershed protection? How can it also help to meet global needs for carbon sequestration and biodiversity conservation? And, most importantly, what policies and instruments can be employed to encourage private firms to integrate these and other non-timber forest values into their fibre production systems?

To identify effective market and regulatory instruments for ensuring that the private sector produces social and environmental benefits from forest management and to promote these instruments.

• Six published country studies/recommendations on privatisation and key governmental/civil society instruments for improving the environmental and social performance of the private sector; these may form a basis for country strategies on private sector roles.
• Global study of recent experience, and guidelines on privatisation and instruments, drawing from the six country studies and key experience elsewhere.
• Parallel corporate case studies on the potential and constraints of different instruments.
• Papers, talks and other inputs into key fora relevant to determining private sector roles, viz.: the Intergovernmental Forum on Forests, World Business Council for Sustainable Development.
• Project documents designing pilot activities and capacity development in the six countries and elsewhere.