Impacts of Policies to Eliminate Illegal Timber Trade · Policies to eliminate illegal timber trade...

Impacts of Policies to Eliminate Illegal Timber Trade

Ed Pepke

Jim Bowyer, Steve Bratkovich, Kathryn Fernholz,

Matt Frank, Harry Groot, Jeff Howe

www.dovetailinc.org

Society of Wood Science and Technology International Convention,

Grand Teton National Park, Wyoming, USA, 7-12 June 2015

Dovetail Mission Statement

Dovetail Partners provides authoritative information about the impacts and trade-offs of environmental decisions, including

consumption choices, land use, and policy alternatives.

ContentsIntroPolicies to eliminate illegal timber trade

US Lacey Act AmendmentEU Timber RegulationAustralian Illegal Logging Prohibition Act

Why certification alone doesn’t insure legalityImpacts on timber tradeEffects on the tropical timber tradeChanging trade patternsWhat is needed to further reduce illegal tradeConclusionsQuestions, discussion

I. Introduction

Illegal logging

In contradiction with national laws

Harvesting, transport, processing, buying, selling

Laws on forest management, access to resources, land tenure, environment, labor, commerce

Illegal timber trade

Import or export of

Illegally logged timber

Legally logged, but subsequent

illegal acts during transport,

processing, etc.

Costs of illegal timber trade

$1 billion/year to US timber trade (Seneca Creek & Wood Resources Intl, 2004)

$15 billion loss in revenues in developing countries (World Bank, 2006

$30-100 billion globally (Interpol & UNEP, 2012

Note: no accurate estimation of full costs

Source: UN Environment Programme and Interpol, 2012.

You are here

Illegal Trade of Timber and Illegal Logging

Brief history of illegal logging & trade policies

G-8 Action Programme on Forests, 1998

G-8 Plan of Action to reduce illegal logging & trade, 2005

FLEG (Forest Law Enforcement & Governance), 2001

FLEGT (with T=Trade) Action Plan, EU, 2003

Lacey Act Amendment, US, 2008

EU Timber Regulation, 2010/2013

Australian Illegal Logging Prohibition Act, 2012

II. Policies to eliminateillegal timber trade

Lacey Act Amendment, US, 2008

Premier legislation banning illegal timber

Throughout wood chain

Importing, exporting, buying, selling, receiving

Companies to exercise due care to ensure compliance (degree of care necessary)

Progressive penalties up to felony

EU Timber Regulation, 2013

Prohibits placing illegal timber on EU market

Operators (1st companies) exercise due diligence

EU member states enforce and determine penalties via designated Competent Authorities

Due diligence systems include

Info describing timber e.g. origin, species, quantity, compliance with national laws, etc.

Risk assessment of illegal timber

Risk mitigation. When risk exists:Additional info

Additional verification

Systems created in-house or outsourced to Monitoring Organizations

Australia Illegal Logging Prohibition Act, 2012

Criminal offence to intentionally import or process illegally logged timber

Businesses to practice due diligence

Compliment LAA and EUTR

Other countries laws

“Illegal trade” specific to timber

Procurement regulations for certified wood

Japanese Green Purchasing Law, 2006. Must import sustainable and legal wood

China developing legal verification policy

Comparison of policies

Same goals to eliminate illegal timber

EU & Australia use prescriptive approach

Lacey is fact based, so individual company responsible for compliance

EUTR accepts FLEGT-licensed & CITES permit

None accept certification of SFM alone as proof of legality

III. Why certification alone is not sufficient to ensure legality

Certification of sustainable forest management

Must be legal ownership, harvest to be certifiedBut illegalities can occur after logs leave forest

TransportProcessingTradeLabor

Certification systems modify standards to ensure legality, align with LAA and EUTR

PEFC has Due Diligence System beyond EUTR requirementsFSC elaborated its definition of legality, and incorporated trade and customs laws

IV. Impacts to date on the timber trade

Raising awareness of illegal logging & trade

Forest sector and beyond

Deforestation, illegal logging, trade

Value of forest management, periodic harvests, sustainability

Support of policies by timber industry

Beyond improving image

Increasing revenues, sustainability

Due diligence systems

Greater knowledge of sources of timber

Establish increased awareness of risks and their minimization

Increased certified forest

products

Changed some traditional

purchasing

Confiscation, court cases

US: Gibson Guitar

Imported of illegal ebony and rosewood from Madagascar, India

Claimed improper classification

Paid fines, forfeited wood

US: Lumber Liquidators. Case in progress

UK: Investigating Chinese plywood. Only 1 of 16 UK importers met due diligence requirements. Poplar core legality can’t be controlled

Substitution

Temperate for tropical

Appearance

Durability

Non-wood for wood

Alternative, less-stringent markets

US Steel promo !

IV. Effects on the tropical timber trade

0

100

200

300

400

500

600

700

800

900

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Mil

lio

n m

3 i

n r

ou

nd

wo

od

eq

uiv

ale

nt Doubled from

1992

Global trade of wood and paper

20% drop

Source: FAO ForesStat, 2014

0

10

20

30

40

50

60

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

US

$ b

illio

n

Temperate Tropical

Based on volume tropical is consistently 17%

Based on value, nearly twice as valuable,falling slightly from 34% to 32% in 2013

Market share of temperate and tropical timber

Source: ITTO, 2015

0

1

2

3

4

5

6

7

Millio

n m

3

Industrial roundwood Lumber Veneer Plywood

EU tropical timber imports

EU tropical timber imports are only 3% of volumeFallen by 66% from 1995This works against FLEGT Action Plan goals of importing more tropical timber from partners.

Source: ITTO, 2015

V. Changing trade patterns

Changing trade patterns

Before EUTR in March 2013, heightened buying

LAA

Raised import prices 25-50

Reduced tropical imports by 33-75% in volume

Changed trading partners, e.g. Brazil, Indonesia

FLEGT-licensed timber 2016

China

World’s largest importer of many timber products

Must prove legality for US, EU customers in conformity to LAA & EUTR

Increased focus on growing domestic demand

If legal timber flows to US, EU: RISK

Illegal timber to less demanding markets

Continue to undermine efforts to reduce illegality

VI. What is needed to further reduce illegal trade?

Concerted global action!

Collaboration between countriesPolicies

Enforcement

Realization of benefits of legal trade for increased revenues (timber sector and governments

More bilateral partnershipsE.g. EU voluntary partnership agreements

Bilateral agreements with non-VPA candidates, e.g. China

Enforcement of legislation

Research into magnitude of problems

VII. Conclusions

Illegal timber trade

Illegal timber trade negatively affects forest sectorSustainability

Revenues

Image

Tremendous social, economic, environmental consequences

Confusion of illegality and sustainability lead consumers away from tropical timber, and all timber. More than certification needed to restore confidence.

Successful initiatives, but long way to go

Government policies attack problem with different approaches

LAA, EUTR, Australia…next?

Strength of policies tested in courts

Require consistent enforcement

Strive for benefits

Communication of policies and their positive impacts

Consistent promotion of SFPM for SFM (Sustainable Forest Products Marketing)

Build “legality” into marketing approach

The bottom line

Governments, backed by legal timber trade, tackling disastrous effects of illegal logging and trade

Far-reaching effectsLoss of forests & their attributes

Loss of revenues for communities, industries, governments

Confusion about illegality less environmentally sound choices

Effective, enforced policies

restored confidence in wood

SFPM & SFM: renewable supply of wood & non-wood

Questions? DiscussionEd PEPKE, Associate, Forest Products Marketing and Policies

Ed@dovetailinc.org www.dovetailinc.org

Co-authors:

Jim Bowyer, Director of Responsible Materials, jimbowyer@comcast.net

Steve Bratkovich, Project Manager for Recycling and Reuse, sbratkovich@comcast.net

Katie Fernholz, Executive Director, katie@dovetailinc.org

Matt Frank, Program and Research Associate, matt@dovetailinc.org

Harry Groot, Associate, harry@dovetailinc.org

Jeff Howe, Founder and Chairman, jeff@dovetailinc.org