Panamanian Forest Code is comprised of several dozen pieces of legislation in the form of laws, decrees and resolutions. Of these, The Resolution of 1998 “Resolución de Junta Directiva Nº 05-98, de 22 de enero de 1998”, determines the rights of use for native forest and outlines the legal requirements and registrations necessary to undertake any activities that pertain to “natural forest.” For all international treaty and carbon forestry purposes, the Panamanian Forest Definition as per the FAO Global Forest Assessment of 2010 is:

Forest lands: Lands that extend for more than 0.5 hectares with trees of a height greater than 5m and greater than 10% canopy coverage, or of trees capable of reaching that height en situ.

Other Forest Lands: Land not classified as forest that covers more than 0.5 hectares, with trees taller than 5m and with a canopy cover of 5-10%, or with the capacity to exceed these heights en situ, or with a mixture of shrubs, vines and trees with coverage over 10%.

Panama therefore defines all lands as forest that have greater than 0.5ha in area, with trees over 5m in height, and canopy coverage of more than 10% of the area, or “that have the capacity to achieve these conditions.” This last part is a very subjective addition to an already broad definition, and fortunately Panama’s Resolution of 1998 caps the lower bound for the age of secondary forest at five (5) years.

The Panamanian Resolution of 1998 defines rastrojo as any “pioneer forests” in early stages of succession of less than five (5) years of age for the purposes of the enforcement of legal norms. This indirectly defines secondary forest as any forest assemblage that is more than five (5) years of age. This has major implications for landholdings, as the Panamanian Forest Code is more restrictive in dealing with native forests as opposed to “rastrojo.”

Pasture does not immediately revert to rastrojo, and typically it takes two years for a pasture land to be colonized by native forest species and become rastrojo. Given this two year establishment “grace” period plus the additional five years for rastrojo to become forest, the time threshold for abandoned pasture lands to legally become secondary forest formations is typically seven years.

Forest Categories

The way in which Panamanian forests are defined, domestically as well as internationally, has much bearing from a legal and certification standpoint in terms of the acceptable uses and management of the lands and their biological assets.

In order to understand the true age and formal definition of forests and various stages of forest succession and the resulting legal management considerations, one has to take into account the age, species assemblages, canopy closure, height and size of the plant community in question. According to the Resolution of 1998, which is the defining document for all land classification and productive/forestry uses and classification used by the the national environmental authority the Panamanian Ministry of the Environment (Miniambiente), the following important species assemblages are defined: natural forest, mature forest, secondary forest, and rastrojo.

Natural forest: All forested formations with a closed structure, constituted of species that are woody-stemmed and non-woody stemmed, tree, shrub, herbaceous and otherwise, forming a grouping of diverse species that live together in a determined space. Natural forests include formations such as mature or primary forest, secondary forest, intervened forests and managed forests.

Mature Forest: Closed forest formations constituted predominantly by late successional tree species, with vertically differentiated strata with a continuous upper canopy, below which appears an equally differentiated understory. The understory coverage is normally 80% or more. Under this definition are the forests classified by some investigators as “primary” forests, considered where the processes of intervention, alteration and fragmentation have not had visible anthropogenic influence.

Secondary Forest: Forest mass that develops naturally after the total or partial disappearance of the previous forest, whose characteristics, both in terms of composition and size, are different from the forest mass that it replaces. It is a vegetative formation constituted by herbaceous, woodystemmed, shrub and tree species, and is represented by rapid-growth pioneer species and can contain dispersed merchantable trees of diverse sizes and species.

Rastrojo: Naturally closed formations whose state of secondary succession is at an initial stage of development. One encounters herbaceous plants, vines, and shrubs and the species present are of low commercial value, but fulfill functions of soil improvement and watershed protection. Rastrojo trees and shrubs generate the necessary environmental conditions for the establishment of more advanced stage forest species. Species are rapid growth with a dense homogenous canopy. These forest-like associations are also called “pioneer” forests and in accord with the legal norms are considered to be less than five (5) years of age.

The definition of rastrojo as “vegetation assemblages that are early stages of forest succession less than 5 years of age,” has major implications regarding the legality of management activities on properties with rastrojo.

Law 24 of 1992 – Tax incentives and the right to harvest planted forests

Panama enacted Law 24 in 1992 to encourage private investment in efforts to restore the country’s rapidly diminishing tropical forests. In Panama, any wood harvested from a certified project is exonerated from domestic taxes, and project investments are deductible from investors’ domestic income taxes (Article 5), providing major incentives for appropriately structured investments. Furthermore, any equipment and materials for a forestry project may be imported into Panama tax-free (Article 6).

In addition, all timber plantations in Panama must be registered with Miniambiente with active management plans on record. Failure to do so, especially with native species plantations, can cause issues when one seeks to commercially exploit them. Cutting permits are secured from both the local municipal government and Miniambiente, and all transported timber must have cut permits, transport permits and bill of sale on file at all times. Exporting requires customs checks and the exporting entity must be registered with Miniambiente and the Port Authority to legally ship goods.