Welcome to the. Information sessions on FLEGT progress and achievements
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- Loren Horn
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1
2 Welcome to the Information sessions on FLEGT progress and achievements
3 Introducing Hans Stielstra, Moderator
4 Introducing Bernard Crabbé Bob Simpson Duncan Brack Nils Petersen Mark Gregory Thorsten Hinrichs Rune Henriksen Alison Hoare Rupert Oliver
5 VPAs Bernard Crabbé EC DEVCO
6 EU FLEGT Action Plan A process and a package of measures to address illegal logging and related trade which places particular emphasis on governance reforms and capacity building, supported by complementary demand-side measures.
7 FLEGT Regulation (2005) FLEGT licensing scheme and VPAs Ensure that timber from participating countries exported to the EU has been legally harvested, initially covering a limited range of products - roundwood and rough sawnwood
8 VPAs 2003 to 2015
9 EU adopts Action Plan 2003
10 2005 EU adopts FLEGT regulation for VPAs
11 2007 Cameroon, Ghana, Indonesia and Malaysia start VPA negotiations
12 2008 Republic of Congo starts negotiations
13 2009 CAR and Liberia start negotiations
14 Ghana VPA enters into force 2009
15 EU adopts EUTR 2010
16 2010 EU adopts EUTR Gabon and Vietnam start negotiations
17 Cameroon ratified 2011
18 Cameroon ratified DRC starts negotiations 2011
19 CAR ratified 2012
20 CAR ratified Guyana begins negotiations 2012
21 EUTR enters into force 2013
22 2013 EUTR enters into force Republic of Congo and Liberia ratified
23 2013 EUTR enters into force Republic of Congo and Liberia ratified CDI, Honduras and Thailand start negotiations
24 Indonesia ratified 2014
25 Action Plan evaluation 2015
26 Action Plan evaluation EUTR review 2015
27 6 implementing countries 2015
28 9 negotiating countries 2015
29 % of world s tropical forest cover
30 % of EU s tropical timber imports
31 % of global tropical timber trade
32 1 Framed by national decisions
33 National ambitions frame the VPA Country specific Based on national laws and policies Defined through national multi-stakeholders processes
34 2 Beyond initial ambitions
35 Beyond initial ambitions VPA cornerstone of FLEGT All products and all export markets are covered* + domestic market Participation, transparency and legislative reforms are the norm Civil society monitoring has been integrated Governance reforms and legislative clarity are key outcomes Due diligence approaches are developed for imports
36 3 Unprecedented participation
37 Participation is a pillar of the VPA proces 2
38 Participation Space for dialogue and new voices Informs decision making Strengthened capacities of newcomers to participate in dialogue
39 Participation Challenges remain Maintaining momentum Quality of participation New emerging voices need space
40 4 Still waiting for FLEGT licenses
41 Timber Legality Assurance Systems Developing robust TLAS is challenging Progress is mixed Indonesia and Ghana rolled out to whole country - system evaluations are on-going Ambition to start FLEGT licensing by end 2015 / early 2016! Integrating domestic market a challenge Sustained political and institutional will required
42 5 Clarity through legislative reform
43 Legislative clarity Increases awareness Requirements and procedures clarified Process identifies where reforms needed Strengthens national regulations
44 6 Commitment to transparency
45 Transparency Commitments formalized in VPA Government procedures clarify the HOW Civil society lead in some countries Tools National communication strategies Annual reports inform progress Press releases, aide memoires, websites
46
47 7 Monitoring is enhancing accountability
48 Monitoring mechanisms are in place All JICs functioning regularity varies Civil society monitoring capacity strengthened Independent Auditors contracted in two countries Process to better document progress and achievements Impact monitoring planned / underway in three countries Complaint mechanisms in place or to be established IMM in place and started gathering data
49 8 Realizing our ambition takes time and sustained commitment!
50 Challenges Illegal logging continues Ambition versus current practice slow progress sustained political commitment required Engagement with the private sector - Integration of local /informal operators Addressing tenure rights Conversion of forest land to agriculture Global change in tropical timber markets Demand side measures effective implementation required by all consumers
51 Helping you understand FLEGT Voluntary Partnership Agreements
52
53 Closing thoughts 1. Beyond initial ambition 2. Sustained interest and significant coverage 3. Slow and challenging Surprising? 4. Need to balance ambition with realism and to keep systems simple yet solid 5. Tangible results essential to sustain momentum 6. FLEGT AP Evaluation in 2015: take stock, learn lessons, contribute to charting the way forward 7. Priorities 2015/16: accelerate progress, integrate VPAs into country frameworks, private sector, impact monitoring and FLEGT licenses on the EU market!
54 Support to producer countries Bernard Crabbé Bob Simpson
55 Support to timber-producing countries In the FLEGT Action Plan (Section 4.1): Equitable and just solutions: community based forest management, land tenure, access to forest resources, local participation Verification systems: track timber from point of harvest to final markets Transparency: availability of accurate information in the public domain, independent monitoring Capacity building: trainings, awareness raising to public sector (different Ministries involved), CSO and PS. Policy reform: simplification of procedures, new incentives that encourage legal activities
56 Support to timber-producing countries Different instruments can be mobilized to complement the resources from our partners 1. EU: national, regional and thematic programmes (GPGC) 2. Member States 3. EFI FLEGT Facility 4. EU FAO FLEGT Programme 5. Other multilateral (e.g. WB ENPI) 600 million EUR ( )
57 Timber-producing countries landscape VPA countries Other producing countries Engaged in governance dialogue
58 Support to timber-producing countries Verification Systems VPA Committees Transparency Local NGOs Policy Reforms Populations Indigenous people FLEGT Facility EC EU Del Traceability Independent Observation Domestic Market FLEGT Licensing Private Sector Impact Monitoring GVT Agencies Certification Research Institutes EU FAO EU MS Others Capacity building Independent Audit Communication
59 Support to timber-producing countries Country resources VPA Negotiation Global CfPs ENRTP, GPGC EC EU Facility Technical Expertise VPA support Knowledge products EU Del Local CfP EDF support VPA Implementation ROLES Global & country level EU-FAO Support projects Assistance to GVT Knowledge sharing Facilitation Technical Assistance Fund Programmes EU MS Others Implement Projects or Programmes
60 Private Certification Certification and VPA in Cameroon Implemented by Ministry of Forest and Wildlife (MIFOF) Recognition of voluntary certification standards and bodies in the VPA TLAS Avoid duplicate legality controls (cost, time, etc.) Acknowledge efforts
61 Transparency & Governance Transparency in Congo Implemented by CAGDF / WRI Database on VPA LD verifiers 13 logging companies received training 8 companies have uploaded data Help international clients (EU, US) comply with Due Diligence requirements
62 Community Forestry Community Forestry Myanmar Implemented by Fauna and Flora International Promote Community Forestry (CF) and small holder forestry Guidance note for Simplified Forest Inventories Contribute to revision of CF Instruction by the MoECAF led CF Working Group.
63 Law Enforcement Trans-boundary collaboration in Guatemala and Belize Reduce illegal logging in transboundary area Joint patrols trained, maps and data improved, Government Task Force created in Guatemala Permanent coordination between government, municipal authorities and local communities MoU between GoG and GoB signed in December 2014
64 Bob Simpson goes here
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66
67 Promoting legal and sustainable timber: The role of public procurement policy Duncan Brack
68 Public procurement policy: general Use of government s purchasing power in market to achieve outcomes examples as far back as nineteenth century Public procurement accounts for average 12% GDP Though split central / regional / local
69 Public procurement policy: timber Public sector major purchaser of timber products: Paper and packaging Furniture (office, street, park) Timber for construction and maintenance (social housing, schools, hospitals ) Product-specific data generally lacking, but is clear significant impact in some sectors, e.g.: UK office furniture, 30 50% purchased by public sector Harbour and flood defences Also can have knock-on effects (20 40%?)
70 Timber procurement policies Public procurement policy used for timber since 1970s FLEGT Action Plan stimulated development relatively easy early step that could be taken Voluntary EU Green Procurement Policy process Common criteria, now 20 product groups 2008: 9 countries with timber procurement policies 2015: more than 25 countries (19 in EU) Many examples of regional and local governments, major public projects (e.g. London Olympics)
71 Objectives and criteria Mostly aiming to purchase legal and sustainable timber Some aim for legal, encourage sustainable Some countries develop own criteria for legal and sustainable Some use certification scheme criteria
72 National timber procurement policies Comprehensive criteria-based: Belgium, Denmark, Luxembourg, Netherlands, UK Simpler scheme/document-based: Australia, Austria, China, Finland, France, Germany, Italy, Japan, Latvia, Lithuania, Mexico, New Zealand, Norway, Spain, Sweden, Switzerland EU GPP-based: Bulgaria, Cyprus, Czech Republic, Malta, Slovenia Italics: voluntary policy Not all policies cover all product categories
73 Satisfying the criteria Main challenge is to make it easy for government buyers to ensure products meet criteria Criteria generally satisfied through certification schemes So market impact may be similar whatever the criteria Though also note impact on certification schemes Some use wider range of evidence Several recognise FLEGT licenses, some as evidence of legal (including GPP), some as evidence of legal and sustainable, some as own criterion
74 Impacts Impact on penetration of certified timber products UK: 2008 study: certified products 80% of market (domestic and imported) up from 55% in study: identified TPP as one of drivers Netherlands: Timber: 13% (2005) 34% (2008) 68% (2011) Paper: 33% (2011) 2011 ETTF survey: public sector and commercial big buyers main drivers for demand for certified products
75 Conclusions Timber procurement policies are useful tools in helping to steer the market Can be developed and introduced relatively quickly (so for some countries, early action under FLEGT Action Plan) Send signal to market, reinforce other actors Support for buyers necessary: guidance, promotion, communication (e.g. CPET in UK) Appear to have impact in terms of increasing market share of certified (FSC and PEFC) products Comprehensive criteria-based policies have advantages Positive impact on schemes themselves More difficult to draw up, but plenty of models Useful lessons from timber for procurement policy for other products (e.g. palm oil)
76
77 Perspective of the private sector Measures taken by ETTF members Nils Olaf Petersen GD Holz e.v.
78 The private sector? Support for VPAs! Of utmost importance in context of EUTR 10 years of FLEGT! no licensed timber yet BUT still: Investments nevertheless useful! education, raising awareness, developing TLAS systems
79 What did ETTF members do to assure legality? On the import side: Partner in TTAP Codes of conduct in majority of ETTF countries Sanctions on illegal trade Certification
80 What did ETTF-members do to assure legality? On the import side: Strong support for EUTR Monitoring EUTR effects Members applied for MO DDS for EUTR-compliance STTC
81 What did ETTF members do to assure legality? On the export side: Under TTAP important supply chains have been analysed on legality gaps Support for building up capacity. With DIFID grant. A.o. for SMEs in Africa EUTR requirements imposed on suppliers
82 Finance and investment Mark Gregory FERN
83 EU FLEGT Action Plan: Financing and Investment It called for improved due diligence by banks and investment institutions. Specifically, it committed the EC to: Encourage financial institutions to take environmental and social factors into account in assessing forestry investments; Foster the development of specific procedures for environmental and social due diligence for Export Credit Agencies and the European Investment Bank;
84 FLEGT Action Plan: Financing and Investment Identify ways to assist Export Credit Agencies and other public lending bodies to obtain better information about forest sector investments and associated risks; Address the issue of money laundering of illicit revenues associated with forest crime.
85 Financial sector record on due diligence? There have been big changes in bank and investor due diligence policies on paper. EU-based financial institutions, especially banks, often have elaborate internal client / investment screening processes that build on international frameworks, such as PRI, Global Compact, Equator Principles These due diligence processes are much more sophisticated than a decade ago (although often rely on certification schemes such as RSPO and FSC, which NGOs believe are seriously flawed) But It is hard to say how important the FLEGT Action Plan has been in promoting this change it is probably one of several factors driving reform NGO investigations suggest implementation of financial sector due diligence policies has often been poor
86 EU initiatives relevant to due diligence Accounting and Transparency Directives Extractive and logging companies required to publish details of payments made to governments for access to natural resources, in every country they operate in Enables civil society in resource-rich regions to track what happens to revenues from mining and forestry helping them ensure money is used for local and national developmen Forestry companies must disclose payments arising from the logging of primary forests
87 EU initiatives relevant to due diligence Non-Financial Disclosure Directive (not yet in force) Requires approx. 6,000 large EU companies to disclose information on policies and record on the environment, respect for human rights, combating corruption (+ other issues) in their management report - not the accounts Mainly applies to EU stock market listed companies employing more than 500 people. May also include unlisted companies, such as banks, insurance companies, and others designated by member states because of their activities, size or number of employees.
88 Export Credit Agencies Fern research found Export Credit Agencies to be mostly irrelevant to forestry deals except in pulp and paper ECA social and environment safeguards have been tightened but probably not due to FLEGT, and they are still weak. Any FLEGT Action Plan Mark 2 must take Development Finance Institutions into account
89 Money Laundering Efforts to implement the money laundering provisions of the FLEGT Action Plan ran into practical problems, including: Illegal timber transactions are hard to distinguish from legal transactions, making identification of money laundering difficult Financial Intelligence Units don t see illegal logging as a high priority issue European Financial Intelligence Units only likely to pursue cases where action is also taking place in a timber producing country
90 Conclusions Signs are that the Commission s follow up on the financial and investment provisions of the Action Plan has generally been less active than in some other aspects of FLEGT European financial institutions do take environmental and social issues more seriously but FLEGT has been only one of several factors driving reform + implementation of due diligence has often been poor EU should be given credit for initiatives, such as the Transparency and Accounting Directives and Non-Financial Disclosure Directive, which are relevant but not directly related to FLEGT There was an effort to tackle money laundering but it didn t get very far, while Export Credit Agencies turned out to be of limited relevance False starts should be seen as a useful and necessary learning experience not as failure. Banks and investors are crucial players in forest destruction but we re still in the early stages of understanding how to address their role. Giving up not the solution
91 Progress of EU-Timber Regulation in the EU What is achieved and what is still to do? Thorsten Hinrichs Federal Ministry of Food and Agriculture, Germany
92 1. Implementation in all MS State of implementation of EU Timber Regulation in 28 Member States State of implementation of EU Timber Regulation in 28 Member States Competent Authorities Penalties Checks Austria Belgium Bulgaria Scoreboard published by Commission on their webpage 20 MS: all obligations fulfilled (after 2 years) COM is working closely together with MS to reach high levels of uniform implementation across the EU
93 2. Changed behavior of operators Operators are the ones who decide about import They have to know about EUTR: Information campaign of Commission Also in many MS but probably not in all They have to act accordingly: Controls of competent authorities Also actions of NGOs can be helpful Experience in Germany: Most companies know (registration) and act but +/- 25 % have to do better Differences by sector (e.g. furniture worse than raw wood)
94 3.Information to help Operators with DDS Operators need a lot of information for their Due Diligence System (DDS) It is their responsibility! They have experience in their products, their suppliers and the countries they source from EUTR-information-platform: legal-timber.info => only very basic information But many information sources available: e.g. illegal.logging.info, EFI-FLEGT-facility or Risk-Tool (FLA, USA) Some confusion with EUTR product-scope could be revised soon in order to include e.g. chairs, tool-handles, pencils and books
95 4. Monitoring Organisations Main purpose: to help operators with their DDS, esp. SMEs Slow start with recognition of Monitoring Organisations (MOs): 2013: 2 MOs, 2014: 4 MOs, Now: 9 MOs Quality more important than speed: They have to be able to consult operators on their DDS correctly So far not many operators are using MOs as foreseen in the EUTR But this may change now as more recognized MOs are available More exchange between MOs and COM / competent authorities (CAs) is foreseen
96 5. Cooperation of Competent Authorities Discussion and exchange important Official meetings: FLEGT-Committee, FLEGT-Expert-Group Informal meetings and EUTR-Workshops with different focus (e.g. special products, countries, ) Exchange with CITES-authorities and with NGOs (e.g. on substantial concerns) Interesting case: coordinated action between BE, NL and SE on illegal timber from Brazil Direct exchange between CAs is working on daily basis Also regular exchange with USA and Australia New tool for systematic information exchange: EUTR CA Group on Capacity4dev
97 6. Common interpretation of EUTR Details have to be understood in the same way in all Member-States (MS) Very useful tool: Guidance Document Developed by consensus in the FLEGTcommittee Publically available on the website of the Commission Living document : currently several new topics are discussed But not all cases can be covered in the Guidance Document Also in some topics there is no consensus so far: e.g. confiscation of timber from traders
98 7. Exemplary Action of CAs Confiscation of Wengé from DRC in Germany in autumn 2013: Even though cases are still not finalized they very much raised awareness of operators and shed light on problems with official documents and corruption Recent temporary seizure of timber from Brazil in Belgium: Even though timber had to be released operators cancelled their contracts and Brazilian authorities sanctioned exporting company Recent report in UK on plywood from China: Notices of remedial action and the possibility of prosecution will very likely raise awareness not only in UK but also in other MS as well as in China. Challenges in some MS-CAs include limited staff and support
99 8. Development of control tools Not sufficient just to check documents We also need tools to check the timber itself! Scientific methods are developed (DNA and stable isotopes) In Germany: Thünen Centre of competence Wood anatomy: checking species Genetics: checking species or origin Inquiries are zooming up (Genetics: 10 fold) Authorities, timber trade, NGOs are using it But only used in some MS We need global approach: project Global Timber Tracking Network (GTTN) provided foundation. Second phase should start soon: Your contribution is needed!
100 Drawing the balance Awareness of operators is steadily rising Cooperation of CAs works well Good approach on common interpretation Innovative control tools for timber and products available but need support from more actors COM is working closely together with MS to reach high levels of uniform implementation across the EU Challenges in some MS: limited staff for their CAs Reports from EU-MS ( ) will highlight differences regarding control-quotas, sanctions etc. Product-scope needs to be broadenend
101 Conflict timber Rune Henriksen Project LEAF
102 EU FLEGT on Conflict Timber FLEGT Action Plan intentions Prevent import of illegal timber into the EU Improve supply of legal timber Increase demand for timber from responsibly managed forests
103 EU FLEGT on Conflict Timber Conflict timber 1 of 7 broad areas Loosely defined as timber traded by armed groups, the proceeds of which are used to fund armed conflicts. It is usually unauthorised by the relevant government agencies and therefore illegal, but can sometimes be legal if authorised by the government and taking place under its control. Follow up at international level, e.g. UN Security Council Emphasis sustainable living and good governance Discuss role of forest in conflicts
104 EU FLEGT on Conflict Timber Since 2003? Progress report to Jan 2011 References to high level mentionings, and support of UNSC ban of timber imports from Liberia. Funding of a programme by UK, Sweden and Denmark on supporting indigenous communities forest rights Conflict timber has not captured attention
105 Actors: Transnational organized criminal networks Highly professional, connected and ruthless (hacking, Indonesian logger, using militias in conflict areas, threat finance) These networks will not be stopped by agreements and intentions or certification schemes alone. When wood products come to Europe, more often than not in the form of paper and pulp, it is too late.
106
107 Majority of imports to EU from tropics as paper/pulp EU imports about million m 3 RWE wood products. US 72 million m % of timber trade is composed of illegal / illicit wood. Worth USD billion/yr UNODC: 30-40% of wood products exported from Asia (USD 17 billion) based on illegal sources Products: Illegal/illicit trading in CITES listed species, roundwood and plank, charcoal and paper/pulp.
108 Majority of imports to EU from tropics as paper/pulp But, majority of wood originating in tropical countries imported into EU (86%) and US (62%) is paper and pulp and wood chips.
109 Response: Coordinated LE efforts w Criminal Intel International Consortium on Combating Wildlife Crime (ICCWC): CITES, Interpol, UNODC, WCO, World Bank Project LEAF: (Law Enforcement Assistance for Forests) Interpol + UNEP Awareness raising Capacity building and training Enhanced intelligence sharing Establish National Environmental Security Task Forces (NESTSs)
110 Response: Coordinated LE efforts w Criminal Intel Concretely: Charting and policing smuggling routes, trafficking bottlenecks, harbours Inspecting containers, tracking ships, arranging controlled deliveries, issue international arrest warrants, targeted sanctions, chart networks Conduct financial crime investigations, enforce tax evasion Operations: E.g Operation LEAD (2012 and 2013); Operation Amazonas (2014)
111 Response: Coordinated LE efforts w Criminal Intel Brazil successful LE effort DRC Militarized transnational organized crime. Militias take 1% of profits, rest to organized crime How to deal with conflict timber in a conflict zone? Tanzania training 1,200 rangers over last few years)
112
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