Summary Minutes. of the Second Joint Expert Meeting (JEM 2), during June 2018

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1 Summary Minutes of the Second Joint Expert Meeting (JEM 2), during June 2018 The Second Negotiation Meeting (TWG 2) on FLEGT VPA between Lao PDR and European Union 07 June 2018, Vientiane Capital, Lao PDR 1

2 1 Contents 1. Sessions of JEM 2 (04-05 June 2018) 2. General or cross-cutting issues 3. Joint Assessments 4. Key and agreed points, including points for further work by TEG/TWG 5. Points of discussion for Negotiation at TWG2 6. VPA Negotiation roadmap

3 1 1 Objectives of JEM 2 (04-05 June 2018) To build relationship and trust between Lao PDR and EU on the issue of FLEGT VPA; To agree on some advanced VPA elements like TLD 1 on Production Forest, TLD 7 on Labor Obligation and TLD 8 on Wood Processing and Trade, and the Scope of Products; To get guidance for improving other existing TLDs, TLAS elements on supply chain control and verification, etc; To exchange lessons learnt on the joint assessments; Points of discussion for Negotiation at TWG1 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 3 3

4 1 1 Sessions of JEM 2 (04-05 June 2018) 04 June 2018 Introduction Session 1: Global FLEGT VPA process. Session 2: FLEGT VPA process in Lao PDR and VPA related reforms. Session 3: Draft revised Forestry Law and implications for VPA. Session 4: TLD 1 on Production Forest. Session 5: TLD 7 on Labour Obligations in Forestry and Wood Processing Operations. Session 6: TLD 8 on Wood Processing and Trading. Session 7: Product Scope. 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 4

5 1 1 Sessions of JEM 2 (04-05 June 2018) 05 June 2018 Session 8: Conclusions from three completed Joint Assessments and discussion on pending Joint Assessment. Session 9: Current work on TLAS Annexes. Session 10: Update on state of TLDs 2, 3, 5, 6. Session 11: VPA Negotiation roadmap. Session 12: Issues to bring to TWG meeting (including Agenda). 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 5

6 1 JEM2 Committees European Union 1. Mrs. Gordana Topic (Co-Chair), Policy Officer, Directorate General Environment, European Commission. 2. Mr. Ignacio Oliver-Cruz, Attache, EU Delegation to Lao PDR. 3. Mr. Francois Pravongviengkham, Political Officer, EU Delegation to Lao PDR. Lao PDR 1. Mr. Sousath Sayakoummane (Co- Chair), Director General, DOF, MAF. 2. Mr. Linthong Douangphachanh, Director General, DOF, MAF. 3. Mr. Bounpone Sengthong, DDG, DOF, MAF. 4. Dr. Keomorakoth Sidlakone. DDG, DIMEX, MOIC. 5. Dr. Kaisone Phengsopha, Deputy Head, Postgraduate Student Office, NUOL. 6. Mr. Khamfeua Sirivongs, Head of Division (FSO), DOFI, MAF. 7. Mr. Somvang Bouttavong, Head of Division, DNEP, MONRE. 8. TEGs. Support 1. GIZ ProFLEGT 2. EFI EU FLEGT Facility 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 6

7 2 1 General or cross-cutting issues [Session 2] Update on FLEGT VPA process in Lao PDR The Lao side expressed clarification that process implementation involves all stakeholders based on a 2015 Prime Minister order. Each Thematic Expert Group on each aspect of the TLDs includes government, CSOs, and private sector. We also invite Provincial stakeholders and work together with all sectors. 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 7

8 2 1 General or cross-cutting issues [Session 3] Draft revised Forestry Law -Some highlights of improvement related to FLEGT- Improved definitions (Art. 3 Interpretations of Terms) Degraded forestland: Introduction of qualitative criteria Crown cover less than 10% Volume of standing trees with DBH 10 cm less than 20 m 3 /ha Plantations are now included and defined as Planted Forests Log yard III now defined Definition of Legal timber included Participation of People strengthened as a principle 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 8

9 2 1 General or cross-cutting issues [Session 3] Draft revised Forestry Law -Conversion Areas- New articles for Logging Survey (art. 19) and Logging (art. 54) in Conversion Areas Amended art. 90 on obligations in converting forestland Coherence with National Master Plan on Land Allocation and sectoral and local land use plans No serious impacts on natural environment and society 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 9

10 2 1 General or cross-cutting issues [Session 3] Draft revised Forestry Law -Import and Export of Timber and Timber products- Revised art. 62 confirms export ban for logs, sawn wood and semi-finished products Import of timber shall have a legal permission by the country of origin Treaties and international agreements with Lao PDR as a signatory country are explicitly mentioned 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 10

11 2 1 General or cross-cutting issues [Session 3] Draft revised Forestry Law -TLAS- Art. 25 Timber Legality Assurance System of Lao PDR reconfirms development and use of TLAS, lists the elements and refers to a specific regulation. 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 11

12 2 1 General or cross-cutting issues [Session 3] Draft revised Forestry Law -TLAS- Art. 25 Timber Legality Assurance System of Lao PDR reconfirms development and use of TLAS, lists the elements and refers to a specific regulation. 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 12

13 3 1 Joint Assessments Key points TOR for Joint Assessment on factors affecting markets and trade will be revised and implemented in Lao side sees a strong need for follow up activities on the further development of an inter-ministerial Information management System as an essential tool for supply chain control, verification and FLEGT Licensing. Agreed points Executive summaries of the three completed Joint Assessments will be disseminated online in Lao and English and full reports will be available on request 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 13

14 4 1 Product Scope Key points Lao explained that musical instruments and other craft products were included to promote the production and trade of these items according to our national development strategy (promotion of handicraft for local communities to sharing of Lao culture/products on the global market. Agreed points Lao agreed to add pulp to the product scope list. 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 14

15 4 1 TLD 1 Natural Production Forest Key points The EU proposed to include information regarding the operation of the complaint mechanism in production forest management in the transparency section of the VPA. Lao clarified that technical guidelines are internal government regulations to which the government must comply, and all are legally binding for all addressees. 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 15

16 4 1 TLD 1 Natural Production Forest Agreed points Title of TLD 1 changed to Natural Production Forest to make clear that the TLD is specific to natural forest and to differentiate from planted forest All tracked changes to TLD 1 were cleaned Lao committed to amend legislation in order to fulfil requirements of indicators or verifiers in TLD 1 Such commitments have been identified against the relevant legal reference in the TLD with addition of regulation will be amended ; and footnotes that further explain the amendment needed. 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 16

17 41 TLD 7 Labour Obligations in Forestry and Wood Processing Operations Key points The verifier Inspection report of the Labour Inspection Organization occurs several times and the capacity of Labour inspection division was unclear. Lao explained then that Ministry of Labour and Social Welfare will ensure that all operators will be subject of inspection at least once per year as part of the new annual inspection plan. 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 17

18 41 TLD 7 Labour Obligations in Forestry and Wood Processing Operations Agreed points All tracked changes to TLD 7 were cleaned. Lao committed to amend legislation in order to fulfil requirements of indicators or verifiers in TLD 7. Lao will report on progress after first year of implementation in order to provide assurances about the capacity for labour inspection to provide this verifier. 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 18

19 4 1 TLD 8 Wood Processing and Trading Key points Lao will research the terminology between household and micro and concepts and will update the TLD to accurately reflect the terms used in the law. 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 19

20 41 TLD 8 Wood Processing and Trading Agreed points New legal reference inserted against indicator on CITES compliance: Appendices I, II, and III, as updated and adopted by CITES conference of the parties. All tracked changes to TLD 8 were cleaned Lao committed to amend legislation in order to fulfil requirements of indicators or verifiers in TLD 8 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 20

21 4 1 TLD 2 Conversion Areas Key point The TLD needs to reflect requirements for both state and private conversion projects. Lao explained that the inventory method for conversion areas has to be addressed. Benefit sharing/compensation is still a concern for EU. EU requested to ensure that the TLD reflects due process for land use change as the initial step in the TLD. Agreed point By August Lao will provide a narrative description of compensation and benefit sharing in relation to TLD 2. 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 21

22 4 1 TLD 3 Plantations Key point The government allows investment in plantation in production forest on degraded land. Lao clarified that plantation development can take place both in and outside of forest land. The PMO 13 revisions will allow plantations for acacia and eucalyptus but not rubber. 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 22

23 4 1 TLD 5 Confiscated Timber Key point Lao stated that there in an intention not to allow the export of products from confiscated timber to the EU. This needs further internal discussion on Lao side taking the consequences for the needed supply chain control in wood processing and trade into consideration. 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 23

24 4 1 TLAS Key points The supply chains based on timber sources will be described from the beginning to the end, one-at-a-time to build the TLAS starting from the supply chain for production forest EU asked to see the detailed responsibilities of the agencies responsible TLAS and relevant legislation regarding confiscated timber may need to be examined in case of not allowing export to Europe 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 24

25 4 1 Other points Key points Lao explained that all the forest land has been classified. EU explained that we don t want the VPA to be a factor contributing to the closure of small holder operators and asked whether there other measures planned to help households and micro operators. Lao side presented safeguards measures for household businesses and micro operators in wood processing: o Capacity building in production management and operational control in order to fulfil requirements on input/output monitoring. o Better access to legal timber sources (Revision of legislation for timber auction (MOIC Regulation1726) and operational license (MOIC Decision 0719). By August Lao will provide a narrative description of timber from Village Use Forest. 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 25

26 51 Points of discussion for Negotiation at TWG2 Long term vision/intention to keep timber sourcing sustainable, to come from natural production and plantation, not only coming from conversion areas. Capacities needed for the VPA process How to follow-up on 1, 7, and 8 on agreed amendments and specific point on TLD 8 [TLD 8: EU needs to see a commitment to categorize other wood processing enterprises then plywood companies for environmental impact assessments (ESIA)]. Road-map. 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 26

27 61 Road-map Joint EU-Lao PDR Roadmap for FLEGT VPA Negotiation (Draft updated during JEM2 on 05/06/2018) 07/06/2018 2nd Face-to-Face Negotiation Lao-EU FLEGT VPA 27

28 Thank You 28