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The EU Timber Regulation

The EU Timber Regulation. and FLEGT in Southeast Asia . Hanoi, 16 November 2011 Tim Dawson EU FLEGT Facility. The EU Timber Market . The EU as a whole is the world’s largest consumer of timber products Only about 10% of the timber used in the EU is imported

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The EU Timber Regulation

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  1. The EU Timber Regulation and FLEGT in Southeast Asia Hanoi, 16 November 2011 Tim Dawson EU FLEGT Facility

  2. The EU Timber Market • The EU as a whole is the world’slargest consumer of timber products • Onlyabout10% of the timberused in the EU is imported • An estimated 20% of these imports are from illegal sources • Vietnam, Thailand and China are manufacturing hubs, sourcing globally – and regionally from Malaysia, Indonesia, Cambodia, Laos, Solomon Islands, PNG and Myanmar • Tropicaltimberhas a dubiousreputation for legality Countries exporting to EUValue (in Billion USD) 1. China 6 2. US, Russia, Brazil 4 – 4.6 3. Switzerland, Norway, Canada 2 – 2.6 4. Indonesia, Malaysia 1.2 – 2.6 5. Chile, Vietnam 1 6. Cameroon, Gabon, Thailand 0.45 – 0.7

  3. Illegal logging and trade; What is at stake? • Loss in assets and revenues • Forest degradation and loss of future economic and trade opportunities • Trade reputation • Deforestation and climate change • Loss of biodiversity • Undermining the rule of law • Legitimate operators find it hard to compete and invest

  4. EU response: the Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan The 2001 East Asia Bali FLEG Declaration was a catalyst Civil society, industry, governments pressure: stop the EU acting as a market for illegally harvested timber • 2003 FLEGT Action Plan • Towards Sustainable Forest Management, good governance & transparency • Mix of supply and demand sides activities: • New Legislation • Bilateral Trade Agreements • Encouragement of public and private procurement policies Aim to eliminate trade in illegal timber in the EU

  5. New Legislation The 2010 EU Timber Regulation: • To prohibit placing on the market of illegally-harvested timber • To assure consumers the products they buy are legal • To provide a level playingfield for timbertraders on the EU market • Regulation is binding and applicable in all 27 EU Member States

  6. EU Timber Regulation - Main obligations - It prohibits the placing on the EU market of illegally harvested timber and products derived from such timber 1 It requires EU traders who place timber products on the EU market for the first time to exercise 'due diligence‘ 2 Other traders further down the supply chain must keep records of their suppliers and customers 3

  7. EU Timber Regulation- What is ”Due Diligence”...? 1. INFORMATION 2. RISK ASSESSMENT 3. RISK MITIGATION Operator must have access to information describing the timber and timber products, country of harvest, species, quantity, details of the supplier and information on compliance with national legislation. Operator must assess the risk of illegal timber in his supply chain, based on the information in 1. and taking into account criteria set out in the regulation. When there is a risk of illegal timber in the supply chain, the operator must mitigate that risk by requiring additional information and verification from the supplier.

  8. EU Timber Regulation- What is legal...? Legality is defined on the basis of the applicable legislation of the country of harvest, covering: • • • • • • Rights to harvest within legally gazettedboundaries • Timber harvesting, incl. environmental and forest legislation • Forest sector-related trade and customs legislation • Payments for harvest rights and timber, incl. duties related to timber harvesting • Third parties’ legal rights concerning use and tenure affected by timber harvesting

  9. EU Timber Regulation- which products...? • Almost all timber products covered, including solid wood products, flooring, plywood, pulp and paper • Not included: recycled products, printed papers such as books, magazines and newspapers • The product scope can be amended • The Regulation applies to both imported and domestically produced timber and timber products

  10. EU Timber Regulation - Implementation - 3 March 2013 December2010 EU Timber Regulation applicable / operational ByJune 2012 • Regulation entered into force • Prohibition • “Due diligence” • Traceability EU Implementing Regulation: more detailed rules on the "due diligence system" rules for recognition of monitoring organisations

  11. EU Timber Regulation- How to react …? EU timber operators will be looking for assurance that the timber is legally harvested: Negotiation of FLEGT Voluntary Partnership Agreements between the EU and timber-exporting countries Private sector initiatives (e.g. forest certification and legality verification) Use other means of providing information on legality

  12. Voluntary Partnership Agreements - What is a VPA? • Legally-binding international treaty (not “voluntary” once agreed) • Timber-producing countries agree to licence their timber exports as legal • EU agrees to accept only licensed imports • Backed up EU trade legislation (2005 FLEGT Regulation) • Legality assured through an agreed Timber Legality Assurance System (TLAS) • Supported where necessary with development and implementation support

  13. Voluntary Partnership Agreements - What is a Timber Legality Assurance System? • Legality definition: country-specific and widely consulted based on country’s applicable legislation • Verifiable control of the supply chain (traceability system), including imports • Sufficient capacity and appropriate tools to ensure effective verification • Licensing by national authority • Independent monitoring of the entire system by a third-party

  14. EU Timber Regulation and VPAs • FLEGT-licensed timber products (and CITES-certified timber products) will be considered to have been legally harvested. These are the only exemptions. • Exporters from countries with VPAs can export FLEGT-licensed timber into the EU without their customers needing to make further legality checks • FLEGT VPA and the EU Timber Regulation are mutually reinforcing

  15. Malaysia Vietnam Indonesia Cameroon Liberia Ghana C.A.R. Gabon Congo DRC FLEGT VPA partner countries June 2011 FLEGT licenses (not yet) System development Formal negotiations Moving to negotiations Preparation, in-country consensus building Introduction to VPAs

  16. Research Needs for Assessing Impact of FLEGT • Impacts on forest sector governance • Effect on processes of allocating land and forest use rights • Impacts on small scale operators & local socio-economic effects • Effect on timber trade: EU & other markets; transaction costs • Effect on timber sourcing • Interactions with and impacts of FLEGT with other policies • Implications of the above for the environment in timber producer countries

  17. Research Needs for Improving Sustainability Indicators for Decision Support • Indicators and systems for monitoring the nature and extent of illegal logging and associated deforestation & degradation • Tools for anticipating potential impacts of changes in governance regimes on sustainability along forest products chains

  18. Other Viewpoints on Ways of Lessening the Ecological Footprint of Trade • Enhance the availability of more efficient processing methods • Develop commercial alternatives for wood sourced from natural forests • Build green supply chains • Source closer to the market • Reduce transportation of ‘waste material’ • Ensure efficient modes of transport are used

  19. Thank You • For more information, please contact • tim.dawson@efi.int • or • visit our website at • www.euflegt.efi.int

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