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UK Trade Initiatives

UK Trade Initiatives. Presentation. UK Timber Trade UK Trade and Indonesia TTF Trade Initiatives China Final Thoughts. Import volumes and % change. 2. UK and Indonesia. Strong timber trading partners 95% Tropical Hardwood Plywood In 2001 Indonesia was UK No. 1 supplier

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UK Trade Initiatives

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  1. UK Trade Initiatives

  2. Presentation • UK Timber Trade • UK Trade and Indonesia • TTF Trade Initiatives • China • Final Thoughts

  3. Import volumes and % change

  4. 2. UK and Indonesia • Strong timber trading partners • 95% Tropical Hardwood Plywood • In 2001 Indonesia was UK No. 1 supplier • Now it is No.4……

  5. 3. TTF Trade Initiatives • Indonesian Action Plan • Timber Trade Action Plan • Market Research • Trade Forums • Responsible Purchasing Policy (RPP)

  6. A. Indonesia Action Plan • July 2003 - June 2004 • Response to “Partners in Crime” • Risk assessment of mills supplying illegal timber • All mills were at risk • Mill Action Plans • Auditing Framework • Dutch trade joined initiative • Trade with Indonesia halved in that year

  7. B. EU Timber Trade Action Plan • €7m 5-year project to help suppliers get verified legal timber with chain of custody from Cameroon, Congo-Brazzaville, Gabon, Indonesia and Malaysia. • Core partners are the UK, Dutch, Belgium, French, Malaysian and Indonesian timber organisations • Tropical Forest Trust (TFT) is project manager • Results: Audited timber from 183 mills and forests – the first step towards sustainability • Operational in Indonesia now

  8. So… To here From here The TFT helps UK, Dutch and Belgium traders Link their supply chains Secure system Legal wood That is independently audited Source: Scott Poynton, TFT

  9. Engagement v. Boycott • Wijma • CIB and Danzer • GreenAcre • Tjipta

  10. C. UK Market Research • Rupert Oliver, Hardwoodmarkets.com • Is there a premium for verified legal or certified timber? • 15 agents, importers and merchants, for timber delivered to the UK, said: • No for softwoods • Yes for hardwoods – 2-30% • A New Trend • “considerable interest” • …..A significant number of larger companies … implementing systematic procedures aimed at ensuring that 100% of their supplies are derived from demonstrably legal sources” • Conclusion: UK Government Timber Procurement Policy is having an impact …. but its patchy

  11. D. Timber Trade Forums • Briefing Pack • Trade forums in 4 African countries (May – July 05) • Ghana, Cameroon, Gabon and Congo Brazzaville – over 300 participants • EU traders talking directly with suppliers • Trade forums in 3 Asian countries (Indonesia, Malaysia, Vietnam) in 2006

  12. Key Messages to industry • EU Markets are changing – there is a premium for verified legal and sustainable timber (Oliver, 2005) • Buyer purchasing policies are beginning to cut out the worst suppliers • Support FLEGT VPA to eliminate the bad guys • Buyers need practical cost-effective solutions • EU market versus growing Chinese/Indian market – choices for producers!!!! • Increasingly difficult to supply the EU market without proof of legality “Get legal or lose markets!”

  13. E. The Responsible Purchasing Policy (RPP) • Assessment of all suppliers • Risk management system • Feedback to suppliers • Requires evidence of legality/sustainability for high risk countries, e.g. Indonesia

  14. Phase 1 - process Phase 2 - performance Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Sustainable Legal -> sustainable Legal Risk assessed Risk assessment system TTF Code of Conduct Continuous Improvement • Traders decide how quickly they move forward • Traders must systematically eliminate high risk suppliers • RPP helps identify these suppliers • RPP helps suppliers reduce their risk rating

  15. TTF member (step 1) Supplier (step 1) TTF member (step 2) Supplier (step 2) completes 1. Questionnaire Questionnaire Guidelines sends 2. Questionnaire Risk rates Returns + docs showing objective evidence 3.Completed questionnaire 4. Info on how to improve risk rating completes Choice tables Takes action Sends results and support 5.Annual Management Report 6. Independent audit

  16. 绿奥诺 4.China 100-120 million people looking for work Not enough trees

  17. Greenpeace International Press Release “London, International — A criminal trail of illegally logged timber from the world's last rainforests, which is 'laundered' in China before arriving in Europe, the USA and other consumer countries, has been uncovered by a major Greenpeace investigation.

  18. The TTF response so far • Examined the allegations • 9 TTF members decided to stop imports of plywood with bintangor-faced veneer from Papua New Guinea • Those members are securing alternative domestic plantation species • Organised the China Seminar • Developed a practical response – the China Action Plan

  19. TTF China Action Plan • Code of Conduct Study of members (TFT) – completed last week • Documentary evidence of legal logs (TTF and TFT) – report due end of March • General Chinese industry study for TTF members • “Scoping and Mill Action Plans” for Chinese suppliers by TFT (financed by TTF agents/importers) • Initial supply chain support work - TTF/TFT joint project (DEFRA) – April 2006 • Supply chain support work under the Timber Trade Action Plan for Latin America and China (submitted Nov 2005, result expected July 2006)

  20. 5. Final Thoughts • Importers have a responsibility to act • But our suppliers need help too • tools and common approaches • what market requires? • what is credible? • A role for NGO’s • Help develop a legality definition for auditing • Dialogue with industry • Get fundamentals right; ownership and tracking • Give industry reasonable targets • Recognise those steps • Encourage good performers • Blow the whistle on bad performers….. • But keep responsible importers engaged

  21. Thank You

  22. www.ttf.co.uk

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