Monday, 12 September 2011

Illegal Logging Stakeholder Conference at Chatham House

This is a Summary of the 18th Illegal Logging Conference at Chatham House, London.  I attended this conference as a volunteer for The Royal Botanic Gardens of Kew.  We start with a brief introduction to the current plans to introduce EU legistlation (Forest Law Enforcement, Governance and Trade - FLEGT) to stop the trade in illegal logging.  This legistlation, and its implimentation is then carefully examined to determine potential enforcement issues. 
Furthermore, the examples of Liberia, Central African Republic and Indonesia, countries who have already entered into the FLEGT process through the Voluntary Partnership Agreement (VPA), enable us to explore and evaluate lessons to be learnt.  Lastly, we look at REDD+ and compare the two approaches to concider how the implimentation of FLEGT can potentially be a useful lesson for REDD+ also.
Topics Covered
·         Forest Certification
·         EU Timber regulation:  Forest Law Enforcement, Governance and Trade (FLEGT)  
·         Voluntary Partnership Agreement (VPA) case studies:  Liberia, Central African Republic and Indonesia
·         Lessons from FLEGT for the agricultural sector
·         Comparisons, linkages and lessons between FLEGT/VPA and REDD+

Timber is a unique product, which links social, governance, loss of biodiversity etc currently 15-20% of illegal timber enters the UK, resulting in a loss of profit estimated at $10-15 billion a year.  UK imports 80% of its timber is imported, so UK has strong trade partnerships.
This two day illegal logging conference looked at the theoretical framework of FLEGT with some examples from already   it was generally agreed that the implementation of this legislation was yet to bring challenges and measures of success.  This conference looked at the new proposed legislation from the perspective of various stakeholders involved; the EU, the UK government, supplier governments, certification bodies, NGO’s, customs and exiles, community groups, logging industry itself and retail etc
The VPA is a trade agreement which brings clarity and aims to improve legal frameworks.  VPA’s promise is to improve law enforcement, reduce corruption etc but only implementation will show results.  It is also a broad enough framework to bring various aspects to the table – forest conservation/preservation, law enforcement, governance and trade.  Legality is the basis for this, rather than sustainability.
Forest Certification
Only 9% of forests worldwide are certified, and only 1% of these are virgin rainforest.  Certification as a framework looks at governance, standards, monitoring, reporting and verification, and chain of custody.  For forest certification to work and an increase in the percentage of forests word wide with certification to occur, both demand and supply side requirements must be taken into account.  The chain of custody approach enables this link between production and consumption to become clear and easily monitored and verified.  
Presently, certification is mainly in operation in plantation forests, rather than tropical forests and hopes are that REDD+ will focus attentions to certification of tropical forests also.  Another aspect of REDD+ that may be useful is that focus may be brought not only to issues of deforestation, but also to issues of forest degradation.   Foreseen problems between REDD+ and Certification are in value assumptions: Is the forest value seen in terms of carbon, rather than social and environmental? 
Although each certification body has differing criteria and approaches towards certification they are increasingly influencing one another.  Moreover, the European Union Timber Regulation (EUTR) will further standardise the definition for the c
riteriam for timber certification in the FLEGT legislation.

EU Timber regulation: Forest Law Enforcement, Governance and Trade (FLEGT)
The new FLEGT (Forest Law Enforcement, Governance and Trade) timber regulation will have CITES linkages and be implemented across the EU states.  Details of enforcement and penalty are yet to be decided, although it is clear that considerations must be made to encourage all member states to offer similar implementation.  Success of this legislation will depend on this robust barrier across the EU, especially due to the fact that once goods are within the EU there is free trade movement between the member states.
The EUTR will involve and affect a wide range of stakeholders including European governments, Developing nations governments, business on both production and consumer ends and local producer and local consumers.  Taking this into consideration, the EU is working on the FLEGT legislation from a partnership approach. 
Governments are working alongside industry to ensure that the EUTR is effective, enforceable and encourages best practice and due diligence.  Best practice and due diligence systems will include the need to have transparency and access to information, and procedures to ensure detailed risk assessments and risk mitigation are undertaken.
Some challenges faced are:
Traceability – Especially relevant to multi-component and complex items such as small pieces of wood on other products, paper pulp, MDF, woodchip, fuel wood and charcoal etc.
Supply chains – One product can include 15-20 suppliers, making supply chains long and complex. 
Transparency – May be difficult as problem of competition within these supply chains as retailers not necessarily in direct contact with all suppliers within a product they sell.
Availability – If only 9% of forests are currently certified an issue may arise of suitable and quantity of available wood supply.
Which forest? – Need to certify primary rainforest, whilst also concentrating on degredated forest such as those found in frontier regions, rather than just plantation forest.  Also may need to think of other types of biome also as biomes are linked to one another, such as bio-diverse grasslands, areas with high carbon stocks and other protected areas of biodiversity.
Time and cost – Resources required verifying the legality, of in some cases hundreds, of products.  May have a long term impact on producers and suppliers e.g. / product manufacturing, wood being substituted with plastic.
Seized Timber – Once any illegal timber has been seized, what will governments to do with it?
Consumption patterns – A shift in consumption patterns could have good and bad repercussions. 
Governance – May encounter governance issues such as apathy, lack of transparency and accountability.  Some areas difficult to govern for various reasons and some governments may not have the infrastructure to implement all that is required for certification such as lack of administrative laws and mechanisms to implement them.  Too many concessions being given out.  Institutional reforms and capacity building may be necessary – for example stronger sanctions, capacity building in police, policy, and judiciary systems.  Consistency is needed between the national and local levels. Capacity to monitor governance – tracking and monitoring systems should be set up for governance within a multi-stakeholder framework.
Social and environmental safeguards -Communities – Will communities be given the opportunity to express their views, will they get a fair deal and be given control to engage with wider economy? Informal logging systems common in many parts of the world – is there any way to formalize these?  Communities may be consulted, but how much of the decision making process will be influence by these consultations and how many decisions will the communities make themselves?
 Enforcement – Law enforcement, including anti-corruption and anti- money laundering are key to addressing illegal logging.  Which agencies should be involved in enforcement?  At different stages need different enforcement rules.  Currently at the border using customs and exiles, however, undecided on who should be the enforcement agency away from the border. Need to train accredited auditors for monitoring and verification, raising issues of internal control and impartiality/corruptibility of auditors.  Issuing of false licenses would be a risk if governance inclined to corruption.
Penalties – As mentioned above, penalties will have to be as similar in greyvity across the EU to ensure exporters and importers are deterred from trading in illegal logging.
Monitoring and Verification – Data will need to be of quality and credible.  There must also be a mechanism to share data between institutions and be made publicly available.  Practical concerns may be the implementation and operation of an online system.  Will access to necessary data be facilitated?  Presently there are separate mandates for accreditation, standard setting, monitoring, verification and registration. Unclear, multiple and contested definitions and estimates on key varieties (CITES).  Problems of measurement, capacity and quality of data. 
It is clear with all these considerations that models must be created with a focus on area and context specific solutions.  It is also fair to point out that the issues here may take decades to iron out.
Voluntary Partnership Agreement (VPA) case studies:  Liberia, Central African Republic and Indonesia
Commercial forestry began in the 1950’s in Liberia.  During the 80’s the iron industry collapsed and logging replaced this as Liberia’s major export.   Civil war raged in Liberia from 1989-2003 and ranks highly on the world poverty index (80% Liberians live on $1.25 and 90% live on $2 per day).  In 2003 the UN Security Council imposed sanctions on Liberian timber exports due to the lack of transparency and the money it generated to fund civil conflict.  The Forestry Development Authority reformed in 2003, combating it’s corrupt past by down-sizing staff numbers and improving salary levels.  It is believed that $64 million is still owed to the Liberian government by concession holders.
Liberia’s forest land mass is 45% of the total land mass of Liberia itself.  The current conservation area stands at 1.7% of this forest land, whereas forest under concessions totals 21%.  Within this there are 590 species of birds and 240 species of timber, of which 60 types are exported.  Serious considerations must be made in terms of existing concessions – many believe them to be illegal concessions due to the context they were issued in.
The UN sanctions lifted in 2006, after all conditions set by the UN had been met.  The logging industry is restarting; however, exports are still extremely low.  This is due to severe capacity challenges such as poor infrastructure, roads, ports, offices, poor financing, logistical issues and lack of equipment.
The VPA has aided in providing a framework and supporting the enforcement of laws.  It also builds on commitments to transparency.
Central African Republic
The threat of losing the European market with the implementation of FLEGT meant that he private sector applied pressure to the Forest Ministry to consider FLEGT process and VPA as an opportunity for the Central African Republic.  Signing up to the VPA has now given the Central African Republic a guarantee of export with the UK.
Central African Republic has 4 million hectors of forest – 1 million of this has not been exploited, due to lack of road infrastructure and wood production area being situated away from this non-exploited forest.  Export prices are higher due to high transportation costs as The CAR is a land locked country.  Due to this, it also means that two FLEGT systems will need to be implemented, one within the Central African Republic and one at Douala Harbour in Cameroon.  Cameroon is also signed up to the VPA and so experiences can be shared, and trade links strengthened between these timber exporting countries.
Reforms of legal frameworks are needed and clarification on land rights, laws, and access is essential.  Monitoring this vast land mass may be difficult and so governance, legal and infrastructure capacity must be addressed.
During the VPA process, it was felt by some organisations that indigenous and community perspectives were not sufficiently explored.  Due to the lack of capacity, scarcity of resources, logistical problems and time constraints involvement was minimal and it is hoped that this will change when the implementation phase begins.  There appears to be confusion on the ground of the difference between VPA and REDD+ initiatives and it is felt that difficult policies must be translated into simplified language so that all persons involved may understand the implications of these policies – again, simplification may not have been needed if communities/indigenous peoples had been involved from the beginning of the process.
Indonesia is the 1st largest exporter of timer within Asia and is ranked as the 5th largest worldwide.  The timber trade to the UK alone is worth $1.2 billion and worth overall $9 billion worldwide.  The entering of Indonesia to the VPA was initially driven by NGO’s, both the government and industry followed, and finally concessionaries (such as factories) also entered discussions.   It is hoped that 4500 exporters will be audited and comply with the FLEGT legislation.  Indonesia hopes to have the timber industries infrastructure fully operational by January 2013 when FLEGT will enter in the EU. 
Country specific problems in Indonesia are things such as the complicated licensing system.  Due to the amount of different licences available, it is relatively easy to cheat the system.  Indonesia are hoping to have a high standard of transparency however current complicated licensing systems make it relatively easy to cheat the system.  A simplification of this may aid in cutting down concessions and a recommendation has been made to put into effect a moratorium to affect all licences until forest areas are defined and legal frameworks have been improved by the government.
Lessons from FLEGT for the agricultural sector
The agricultural sector may also benefit from FLEGT style legislation; however, there are various things that would have to be considered differently.  For example there is not so much state management of agricultural lands, there is less history of transparency within agricultural community, there are various types of crops – each with differing issues to take into account and governments are less likely to see illegality as an issue within the agricultural sector.  However, the sector is facing pressure from NGO’s, consumers and some governments to work towards more sustainable practices.
The example of FLEGT may help the agricultural industry to see the benefits of improving legal frameworks in which sustainability is high up on the agenda.  Brazil is leading by example in terms of legislation which deems deforestation to make way for agriculture illegal.  Consequently, the laws and legal framework created in Brazil has seen success in the rate of deforestation for use in cattle ranching for example.   Supermarkets in Brazil have signed an agreement with the government and producers to only sell beef from legal farms.  This has come about due to having institutional frameworks and laws in place, coupled with demand from a rising middle class.

Due to FLEGT’s success in involving various stakeholders, and in encouraging transparent dialogue between all involved, it is thought that any agricultural equivalent would draw heavily from the FLEGT model.  Another aspect of FLEGT which has aided its success so far is that it works on measures which affect both the supply and demand aspects simultaneously.  Products which may benefit from such regulation are things such as palm oil, beef and leather, biofuels, soy etc.
Comparisons and linkages between FLEGT/VPA and REDD+
·          REDD+ processes are also ongoing in all FLEGT, VPA countries
·         Need to identify lessons from VPA which are of relevance to REDD+
·         Sound governance systems are needed for REDD+ -  VPA will help establish these governance systems
·         Building effective synergies between REDD+ and VPA will support work to stop illegal deforestation at country level
·         Both will require cross sectorial coordination
·         Both centrally designed processes, where government has to play a more significant role
·         Both must build idea of ‘ownership’ – VPA already appears successful in this due to way in which it has engaged with stakeholders
·         VPA also faced similar resistance initially
·         VPA had time to build public awareness and compliance.  REDD+ must not be in too much of a rush to implement on the ground if it wants to succeed in the same areas as VPA.  Needs attention to be paid to the process, time to address conflicts and to build ownership with stakeholders.
·         REDD+ may be able to tackle broader governance issues such as land tenure, and tenure security, therefore has the capacity to work towards a deeper reform.
·         Both will have independent verification systems
·         Both working towards improved governance, and strengthened law enforcement
·         Apply stakeholder model to REDD+ also
·         Liberia- fear that REDD+ will distract from the VPA process and its implementation
·         Unclear benefits to local communities
·         Not enough community consultation

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