Featured Pitch.

Seventythree is a management consulting firm operating at the nexus of the energy, natural resource, land-use and industrial sectors of developing and emerging markets and economies. The company provides a range of advisory and management services to private sector clients, governments, NGOs and philanthropists – ranging from the macro policy level to the factory or farm level.  Seventy Three Pte.Ltd. is based in Singapore, with operations in Indonesia, London and Germany.

Seventythree believes that continued improvement in human flourishing can best take place in democratic, market-based systems of production and distribution in which all forms of capital are considered and valued; including human, manufactured, financial, and natural capital.

Seventythree’s mission is to prove the case, with theory, evidence and demonstration, that respecting natural capital in the pursuit of profit can be compatible with human flourishing.

Training entrepreneurs in Raja Ampat, West Papua

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Seventythree is working with Mazars Starling Resources as part of the project to ensure the political and, social and economic sustainability of the Marine Protected Areas (MPAs) in the Bird’s Head Seascape (BHS) of West Papua. The project is funded by the Walton Family Foundation.

One of our projects is to strengthen the capacity of the local entrepreneurs that own and operate homestays in the Raja Ampat islands.  They already have a good instinctive grasp of the main features and attitudes of a successful entreprenuer.  In fact, they are some of the most impressive small business owners we have encountered in Indonesia in the past decade.  But they are keen to improve their technical skills and thus grow resilient enterprises, and demonstrate to their community (and Papua at large) how financial independence is one of the stepping stones to securing lasting political influence.

Our first training session, held in Waisai in May 2013, introduced the participants to our adaptation of the Osterwalder ‘Business Model Generation‘ planning canvas.  This proved to be an effective way to describe the different building blocks of a successful business.  The next session will drill down into customer insights and how to design a responsive and adaptable business.

Making Private Investments Work for Tropical Forests

coverETFRN-54-1Seventythree contributed an article for issue 54 of European Tropical Forest Research Network Journal (ETFRN). This issue brings together 23 articles that analyse concrete examples of various private actors along the tropical forest-finance chain (small, medium and large forest entrepreneurs and intermediary and advisory organisations). The experience of these frontrunners presents a compelling case for revisiting business as usual. As policy-makers and private actors refine their strategy for seizing opportunities and managing the risks associated with emerging forest-related markets, these articles demonstrate that overall economic, social and environmental benefits can be reaped if investments are targeted correctly.

Dominic Elson wrote the article ‘Rethinking investment in locally controlled forestry’, where he describes the parallels between an ambitious locally controlled natural forest business in Papua (Indonesia), and the history of family forestry in Sweden. He draws on data gathered during a field trip to Sweden in 2012, along with his extensive experience of community forestry in Papua Province.

The abstract is below, and ETFRN Issue 54 can be downloaded from the ETFRN site.

Abstract

Locally controlled enterprises are a good way to achieve sustainable economic and financial returns from forests.

The Forests Dialogue (TFD) has facilitated nine dialogues throughout the world, with more than 300 participants from many different backgrounds. These initiatives tackle the challenges facing locally controlled forestry and determine how more investors can be encouraged to take a serious interest in the sector. It is the first time that investors and forest rights-holders have come together to discuss these issues in such detail. The culmination of this work is a detailed guide for investment in sustainable local forest enterprises (Elson 2012a).

This article applies some of the key concepts presented in the guide to two case studies. These case studies illustrate the challenges to investing in locally controlled forestry and the potential solutions. The guide itself provides much more detail on design- ing investment models, the process of building a business and the ingredients for success.

The term forestry refers here to small- and medium-sized forest enterprises (sMFEs). Experience shows that building this enterprise sector is both the means by which locally controlled forestry will be possible, and the only way in which it can be financially, environmentally and socially sustainable.

Indonesia’s economic development: contributing to a sustainable growth pattern

WP_cover“It would not make sense to undertake a development path that may impose costs on the economy and inhibit progress towards the goals of advancing human welfare. If mitigation of carbon emissions costs jobs and growth, then it may be too high a price to pay. However, it is likely that many of the necessary changes yield more benefits than costs.”

Seventythree was involved in the Wilton Park meeting in Jakarta in September 2012, which was also attended by HE Dr RM Marty M Natalegawa, Minister of Foreign Affairs, Republic of Indonesia.  The summary report was written by Dominic Elson and is available for download from the Wilton Park site.

Key issues discussed at the conference included:

  • The importance of the recognition by the Government of Indonesia that fair and equal access to resources is part of the sustainable use of those resources;
  • Transformation of the energy system is inevitable; while this may appear costly initially, there is longer term benefit and investment in energy infrastructure represents a huge opportunity;
  • Governance issues are crucial and there is a disconnect between central and local government; local ownership and community-based management is required to ensure resilient local livelihoods and sustainable development;
  • Building rural economies through establishing clusters, co-locating generation of renewable energy with businesses needing to use it and integrating landscape planning, can be effective for stimulating sustainable growth with equity;
  • Investment should be directed, or re-directed, to promote low carbon development, and to help Indonesia move higher up the value chain;
  • Coordination, monitoring and evaluation of policies is crucial, while a proliferation of targets can lead to gridlock;
  • Education and training will equip the next generation to make the most of green growth, whilst behaviour change is needed to transform mindsets about energy use and waste;
  • Subsidies need to be tackled, so they are switched from rewarding fossil fuel consumption and towards supporting low carbon alternatives;
  • Fiscal incentives, including taxation policy, are important to create the conditions for green growth to thrive.

Explaining the paradigm

Dominic Elson, CEO of Seventythree, was at World Forest Week in Rome to launch the Guide to Investing in Locally Controlled Forestry.  Profor took the opportunity to interview him for the website.  He gives an explanation of the ‘capital seeking natural resources paradigm’, and why it spells trouble for rural economies.  He also has some blunt remarks to make about corporate social responsibility.

Publication of ‘Guide to Investing in Locally Controlled Forestry’

ILCF Guide

A comprehensive guide to investing in locally controlled forestry, written by Dominic Elson, CEO of international consultancy Seventy Three Pte.Ltd., was launched by IIED in December 2012.

The guide emerged out of 11 international dialogues that assembled more than 400 people to discuss how to make investing in locally controlled forestry (ILCF) happen. It is primarily a tool for practical action – providing guidance on how to structure enabling investments and prepare the ground for asset investments that yield acceptable returns and reduced risk, not only for investors, but also for local forest right-holders, national governments and society at large. After providing strong justification for this approach, the guide sets out a framework for structuring investments with tactical advice for building the partnerships necessary for successful ILCF.

The core of the guide is a roadmap to successful ILCF that covers the business stages of proposition, establishment, validation, preparation, negotiation and performance management – with practical advice for both investors and forest right-holder groups. Case studies of successful ILCF and a range of useful templates and sources of further information are provided.