SmE Initiative of the EU FLEGT Facility

Transcription

1 SmE Initiative of the EU FLEGT Facility (SmE = Small, micro and Informal Economic Entities) Chiang Mai, July 4 th, 2018

2 Overview Focal countries: Lao PDR, Thailand, Viet Nam and Myanmar Timeline: /20 Funding: Sida

3 Objectives Increase knowledge about SmEs in the Mekong region, addressing challenges in operating legally and sustainably in the context of FLEGT VPAs, and facilitate the development of support mechanisms and advocacy.

4 Progress on the SmE Initiative Pilot studies Start Inception Report SmE Assssment Report (Drafts) Final reports Capacity building and support measures Phase 1 Phase 2 Phase 3 Apr 17 Jul 17 Dec 17 Jan 18 June 18 Dec 19 Desk Work Work in Country Revision Commenting and amendments Dissemination

5 How we work in countries Inform VPA process through EU SmE Initiative by: EU FLEGT Facility contracts National SmE Facilitator works with Nat. Stakeholders (capacity building and trainings) Inform VPA process through partner country informs

6 Key findings / challenges for SmEs - Formalisation of informal SmE sectors to lower risks in supply chains - Consideration of specific timber sources, e.g. reclaimed wood, scattered trees, rescued timber and its associated legality evidences / ownership of trees in LD - Gender equality related legal frame works mostly exist, but recognition in every day life needs to be improved.

7 Key findings / challenges for SmEs - Compliance with OH&S and environmental regulations - Informal status and labour regulations - Access to affordable legal raw material (plantation timber?) - Land tenure issues incl. harvesting rights

8 Key findings / challenges for SmEs - Meeting existing factory and production standards - Need for scale sensitive CoC system for SmEs - Awards of village/community forest management rights

9 Conclusion To capture opportunities associated with VPA, technical, financial, organizational and marketing support mechanisms are needed for SmEs along with a friendly legal environment. National forest and timber development strategy, where SmEs have an identified role

10 Government Social value added NGO, CSO Foundations SmEs MLEs Large scale private sector Economic value added

11 Countries cross findings on SmEs Countries 1. Difficulty to source legal timber and to demonstrate legality 2. Substantial efforts needed for wood-processing entities to formalize 3. Robust policies for gender equity exist but often unenforced, largely due to traditional and cultural norms 4. SmEs operate in a precarious environment and experience various legality risks (health and work safety regulations, social insurance and security for hired labourers, formal registration) Laos Mya nma r Thail and Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Viet nam 5. Policies and support measures for SmEs are not effectively implemented or accessible for SmEs Y - Y Y

12 Remaining questions 1. How to approach and deal with large informal sectors? 2. How to facilitate their continuing participation in legal supply chains? 3. How to assure access to legal timber? 4. How to improve competitiveness? 5. How can Gender equality find broader attention in SmE sectors

13 SME Initiative of the EU FLEGT Facility Thank you! Chiang Mai, July 6 th, 2018

14 Examples of Individual Findings In Mekong countries small-scale processors often sell successfully due to valuable timber species in solid wooden products (e.g. Vietnam-wood villages)

15 Examples of Individual Findings Scattered trees in Thailand and Vietnam substantial timber source for SmEs

16 Examples of Individual Findings In Thailand many people find their livelihood in the reclaimed wood sector

17 Examples of Individual Findings New products out of reclaimed timber

18 Rescued Timber Examples of Individual Findings

19 S W O T Analysis Strength Weakness Opportunity Threat

20 Strength SmEs are versatile (high fluctuation between sectors: timber, agriculture, trading/selling and also between formal - informal) Small holders identified by private sector (and government) as substantial timber supplier for national/regional demand to replace imports Strength Weakness Threat Opportunity

21 Weakness SmEs are often small family businesses, lack capacity and access to information, business know how and capital SmEs are usually not well organized though frequently in clusters along supply chains

22 Opportunity Expansion of industrial plantations difficult in crowded Asian landscapes, thus smallholder engagement needed SmE clusters with difficulties in legal timber access could modify product design, mixed with alternative materials Existing national forest and timber sector development strategies could be used to inform SmE sector development and countries may work on these during VPA pre-negotiations In parallel with achieving legal compliance, opportunity for SmEs is through improving competitiveness by e.g. introducing new product designs and appropriate technology, supplying expanding domestic market segments, diversifying materials To engage with SmEs, medium and large companies/associations need to see potential benefits, e.g. improved SmEs production management quality to increase attractiveness as sub-contractors/outsourcing partners

23 Threat Legal complexity is the most severe challenge to SmEs Corruption could become a bigger challenge with strengthened enforcement?????