CITES APPENDIX II LISTING AND FSC CERTIFICATION: COMPLEMENTARY STRATEGIES FOR CONSERVATION AND SUSTAINABLE MANAGEMENT OF TIMBER SPECIES?

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1 CITES APPENDIX II LISTING AND FSC CERTIFICATION: COMPLEMENTARY STRATEGIES FOR CONSERVATION AND SUSTAINABLE MANAGEMENT OF TIMBER SPECIES? A WWF Discussion Paper Overview... 2 Annex 1: Operation of CITES... 4 Annex 2. Comparison of requirements of Appendix II listing and FSC certification... 6 Annex 3. Harmonisation of operation of CITES Appendix II and FSC certification /09/02 1

2 Overview For over a decade, WWF has promoted sustainable forest management through advocacy of forest certification. WWF, together with many other partners, helped establish the Forest Stewardship Council, which is internationally recognised as the most credible timber certification organisation. The FSC accredits independent certifying agencies, which assess whether the management of a forest unit meets the FSC Principles and Criteria. These Principles and Criteria, developed through an extended process of wide cross-sectoral consultation, demand a high level of performance against environmental, social, and long-term economic indicators. FSC certification is widely accepted as the gold standard of good forest management. FSC certification recognises the full range of forest values, including wildlife habitat, biodiversity, soil conditions, land-tenure issues, watershed, cultural and archaeological values, and long-term revenue potential from timber and non-timber resources. In the long term, expanding the proportion of forestry operations under FSC certification initiatives clearly represents the most powerful currently available tool for promoting sustainable management of the world s forests. However, the pursuit of FSC certification faces some hurdles. Forest certification is wholly voluntary, so is reliant on the cooperation of individual companies and operations. It is market led, which means it is reliant on the interest of consumers. It results in products typically carrying a price premium, which means success is dependent on the willingness of consumers to pay more for sustainable forest management. For the medium term future (5-15 years), FSC certified products are unlikely to represent more than a small proportion of the wood product market in tropical countries, and FSC certification initiatives more than a small fraction of forestry operations in biodiversity-rich countries. In these biodiversity-rich countries, including Brazil, deforestation continues at alarming levels and evidence is steadily emerging of large-scale illegal logging. Unsustainable and illegal logging, driven by the promise of short term profits, demonstrates the failure of current regulatory structures to effectively control the timber industry, with serious short term conservation consequences. Given this situation, should the gold standard of FSC be relied on as the sole policy instrument to promote sustainable management of the world s forests? Or can other policy instruments provide further safeguards, perhaps less comprehensive, but more immediate in effect? CITES, the Convention on International Trade in Endangered Species of Wild Fauna and Flora, is an international treaty which uses trade controls to regulate international trade in species listed on three Appendices. It has been in force since While it provides no panacea for deforestation or illegal logging, for certain high value timber species particularly susceptible to over-exploitation CITES has considerable potential to provide a valuable, and complementary, further safeguard. The protection afforded by CITES is quite different to that afforded by FSC certification: rather than promoting environmental, economic and social sustainability, CITES (Appendix II) requirements focus on considerations of biological sustainability and legal acquisition. However, the strength of CITES measures is that they are applicable across its 157 State Parties and involve mandatory, rather than voluntary, obligations, which can be backed up by domestic enforcement measures in importing and exporting countries and the threat of international trade suspensions. In terms of promoting good forest management and combating illegal logging and trade, listing on Appendix II of CITES offers four major strengths 1. (i) First, monitoring of international trade in listed species. Currently, understanding of patterns of exploitation and trade of forest products is hampered by poor understanding of volumes, values, and destinations of traded timber. Under CITES all Parties are required to allow only exports or imports of CITES-listed species accompanied by CITES documentation, establish a system for issuance of permits, maintain trade data, and submit annual reports detailing all imports and exports of listed species. Experience with listing of 1 For a more detailed description of how CITES operates, see Annex I. 20/09/02 2

3 (ii) (iii) (iv) bigleaf mahogany on Appendix III listing has shown that even the relatively incomplete information provided under this measure has yielded unexpected and valuable data on trade flows. Second, the non-detriment and legality findings. States currently have few international obligations to conserve and sustainably use forests and forest species, apart from the unenforceable, aspirational obligations in instruments such as the Convention on Biological Diversity and the Rio Declaration. Under CITES, however, international trade in an Appendix II listed species requires an export permit, and preconditions for gaining a permit are that the specimens are legally acquired and that the export will not be detrimental to the survival of the species. In addition, the species should be maintained across its range at levels consistent with its role in the ecosystem. This judgement is made by the CITES Scientific Authority of the exporting state. While in practice these nondetriment findings are highly variable in scientific objectivity and justification, the procedure of making non-detriment findings is open to international scrutiny through the significant trade process. An independent panel of experts (the Plants Committee) can make recommendations, including quotas, administrative measures, or restrictions on trade. If Parties do not comply with these recommendations, they may face trade suspensions on CITES-listed species imposed by all CITES Parties. Third, verification of CITES compliance through scrutiny of importing countries. Countries importing Appendix II listed species are obligated to ensure that an export permit has been issued, and can indeed inquire of exporting countries when a questionable shipment is received. This is a powerful counter-check on illegal shipments and fraudulent document issuance. Fourth, domestic enforcement and compliance measures. All CITES Parties are obliged to take measures to enforce CITES and prohibit trade in violation of its provisions. These measures include fines, penalties, imprisonment, and confiscation of goods. These measures can complement, rather than conflict with, FSC certification 2. (i) With respect to the sustainability requirements of each system, there is substantial complementarity between the two. Under FSC, certification bodies must be satisfied that forest management operations are fulfilling the Principles and Criteria, which include conserving biological diversity, and maintaining the ecological functions and integrity of the forest. Under CITES (Appendix II listing), the Scientific Authority must be satisfied that the trade will not be detrimental to the wild population, and must limit trade so that species are maintained throughout their range at levels consistent with their role in their ecosystems. (ii) With respect to practical complementarity, timber extracted from an FSC certified forest should certainly qualify for a non-detriment finding, and national Management Authorities could automatically issue export permits to timber sourced from these forests. It might also be possible to exempt FSC timber from some of the usual CITES permitting requirements 3. Further consultation through CITES will be required to determine the feasibility of various harmonisation scenarios. In summary, the advantages of promoting sustainable management of timber species through listing on CITES Appendix II, in addition to through FSC and other policy tools, would be (i) collection of badly needed information about international trade flows in listed species (ii) an immediate obligation on national governments to approve only exports which are legal, and not detrimental to the survival of the species at levels consistent with its role in the ecosystem (iii) increased international scrutiny of range state management of trade in listed species (iv) import controls to prevent illegally harvested timber reaching the market (v) extension of domestic penalties for CITES violations to listed timber species, and finally, (vi) highlighting of the conservation status of listed species and their ecosystems among the media and the public. 2 For a more detailed comparison of the requirements of CITES Appendix II and FSC certification, see Annex II. 3 For more detailed discussion of potential means to enhance complementarity see Annex III. 20/09/02 3

4 Annex 1: Operation of CITES 1. Introduction CITES is the Convention on International Trade in Endangered Species of Wild Fauna and Flora. It is an international treaty, developed in the early 1970s in response to concerns that unregulated international trade in wild flora and fauna was having a detrimental impact on species and their ecosystems. Its purpose is to ensure that no species of wild fauna or flora becomes or remains subject to unsustainable exploitation because of international trade. Today it has 157 State Parties. 2. General obligations For CITES Parties, all international trade in listed species must be in accordance with the terms of the Convention. All such trade in listed species must be recorded, and reported annually to the CITES Secretariat. Specimens of listed species which do not enter international trade are not subject to regulation under CITES. 3. Listing on Appendices CITES Parties agree to implement international trade controls, based on import and export permits, on species listed in three Appendices. (i) Appendix I lists species which are currently threatened with extinction. For these species international commercial trade is banned. This represents only a small proportion (<5%) of the species regulated under CITES. (ii) Appendix II includes species which although not necessarily now threatened with extinction may become so unless trade is subject to strict regulation 4 Note that this does not require that the species is currently threatened or endangered. International trade in species on Appendix II is allowed, as long as an export permit has been issued by the CITES Management Authority of the exporting State, based on certain required findings (see below). (iii) Appendix III provides a mechanism for Parties to enlist the assistance of other Parties in safeguarding their populations of species. Any State may unilaterally list a species for which it is a range country on Appendix III, and this does not require a proposal to be submitted to the COP. Exports of these species from the listing country require an export permit, while exports of the same species from other countries will require a Certificate of Origin. These documents must be verified by importing countries. Decisions about the listing of species on Appendices I and II are taken by the Conference of the Parties, which meets every two years. Only Parties may submit proposals, and any proposal to amend the Appendices requires a 2/3 majority of those voting to be adopted. A Party may enter a Reservation with respect to the listing of a particular species, which means it is not subject to CITES obligations for trade in that species. 4. Trade in Appendix II listed species International trade in a species listed on Appendix II requires an export permit. Both exporting states and importing states must verify this permit before allowing trade to proceed. Export permits can be issued by the CITES Management Authority of the exporting state if the following conditions are met 5 : 4 This provision has been elaborated by more detailed and technical CITES listing criteria (Resolution of the Conference 9.24). The most relevant criterion for Appendix II listing is that it is known, inferred or projected that harvesting of specimens from the wild for the purposes of international trade has, or may have, a detrimental impact on the species by exceeding, over an extended period, the level that can be continued in perpetuity. 5 A third condition relates to welfare of live animal exports and is not relevant here. 20/09/02 4

5 (i) (ii) the Scientific Authority of the exporting state must advise that the trade is not detrimental to the survival of the species (the non-detriment finding), the specimen must not be obtained in contravention of the laws of that State for the protection of fauna and flora (the legal acquisition finding) The Scientific Authority must also monitor the issuing of export permits and actual exports, and provide advice to the Management Authority to ensure that export permits are limited to ensure that the species is maintained throughout its range at a level consistent with its role in the ecosystems in which it occurs. Many Management Authorities determine a national quota to guide the issuing of export permits. This is not a CITES requirement, but rather a management tool employed by exporting countries. Commercial trade in species listed on CITES Appendix II can be carried on at high volumes. For instance, global trade in crocodilian skins from CITES Appendix II listed species is worth in excess of US$200million/year. 5. Compliance with CITES provisions: international and national CITES requirements are obligatory for all Parties (subject to reservations), and at the international level compliance is promoted through two major mechanisms. (i) Trade suspension: If countries are in persistent non-compliance with the Convention, application of trade suspensions by all Parties against the noncompliant Party can be advised. For instance, trade suspensions on all CITES-listed species are currently advised against the United Arab Emirates, Vietnam, Yemen and Fiji. Threats of trade suspensions have proved highly effective in the past in encouraging countries to quickly improve their CITES implementation and enforcement. (ii) The significant trade process: Exports of Appendix II listed species in significant trade (i.e. traded at high levels) can be reviewed by an independent group of scientific and trade experts (for wood products, the Plants Committee). The review examines the basis of the granting of export permits by Management Authorities, with a focus on the scientific nondetriment findings and sustainability of trade. If problems are detected, this Committee can advise recommendations to be made to the Parties concerned, including restrictions of trade, quotas, administrative measures or the carrying out of field studies or monitoring activities. If these are not adequately implemented in the allotted time (90 days or 12 months, depending on the type of Recommendation), trade suspensions by all Parties against non-compliant Parties may be recommended by the CITES Standing Committee. Implementation of CITES at the national level involves enforceable legislation which imposes penalties for breach, including monetary fines and imprisonment. All enforcement of CITES implementing legislation is carried out by national governments, in both exporting and importing countries, and fines, penalties, permit fees, etc., are all nationally determined. A key enforcement provision of CITES is the controls in importing countries, which serve to ensure that shipments can only be imported if they were exported in compliance with CITES requirements. Many importing countries have additional measures to ensure that imports were in compliance with exporting country legislation. 20/09/02 5

6 Annex 2. Comparison of requirements of Appendix II listing and FSC certification In Table 1 (below) the FSC Principles and Criteria are compared against relevant requirements under CITES, including both general treaty requirements and those required for trade in Appendix II species. Examination of this table indicates CITES (Appendix II) requirements form a subset of requirements for meeting the FSC Principles and Criteria. 20/09/02 6

7 FSC principle 1. Compliance with laws and FSC principles. Includes national laws and administrative requirements, payment of applicable fees, taxes and other charges, and respecting provisions of international treaties and agreements, and adherence to FSC Principles and Criteria. CITES obligations (for trade in Appendix II species, unless marked otherwise) Trade of listed species only to be in accordance with terms of Convention Specimens must be obtained in compliance with all national laws and regulations for the protection of fauna and flora Export must be determined scientifically to not be detrimental to the survival of the species 2. Tenure and Use Rights and Responsibilities No corresponding obligation* 3. Indigenous People s Rights No corresponding obligation* 4. Community Relations and Workers Rights No corresponding obligation* 5. Benefits from the Forest No corresponding obligation* 6. Environmental Impact. Forest management shall conserve biological diversity and its associated values, water resources, soils, and unique and fragile ecosystems and landscapes, and, by so doing, maintain the ecological functions and integrity of the forest. Trade must not be detrimental to survival of the species Trade in listed species should be limited to maintain the species throughout its range at levels consistent with its role in the ecosystems in which it occurs 7. Management Plan No corresponding specific obligation, although many countries interpret compliance with the non-detriment finding to require establishment of a management plan 8. Monitoring and Assessment. Monitoring of export permits granted, and actual exports, by Scientific Authority, to Data collected includes yield of all forest products harvested, inform non-detriment findings growth rates, regeneration and condition of the forest, Many countries require monitoring as part of their non-detriment findings and composition and observed changes in the flora and fauna, CITES implementation environmental and social impacts of harvesting and other All exports of Appendix II listed species require verification of import permits operations, costs productivity and efficiency of forest Parties maintain records of trade in listed species management. Reports on trade in listed species are made to the CITES Secretariat Documentation shall be provided to enable the tracing of chain of custody 9. Maintenance of high conservation value forests Trade must not be detrimental to the species Trade in listed species should be limited to maintain the species throughout its range at levels consistent with its role in the ecosystems in which it occurs 10. Plantations No corresponding obligation* Table 1. Comparison of the requirements of CITES (Appendix II) and FSC certification. *Where these issues are the subject of national forestry or other legislation, the CITES legal acquisition finding will require compliance. 20/09/02 7

8 Annex 3. Harmonisation of operation of CITES Appendix II and FSC certification While it appears that the sustainability requirements of CITES Appendix II and FSC certification are complementary, it is also necessary to clarify whether the practical operation of the systems would be complementary. Would CITES regulation add an awkward or unworkable barrier to trade in FSC or other wood products? Would it be possible to harmonise procedures to facilitate trade in FSC products? 1. Procedural requirements Consider export of timber of a given species harvested from FSC certified forests. If a species in question was listed on CITES Appendix II, the exporter would be required to apply to the Management Authority of that country for an export permit. If the Management Authority was satisfied that the wood products were obtained legally, and the Scientific Authority advised that the export was not detrimental to the wild population, an export permit could be issued to the exporter. This permit would need to accompany the shipment to its destination. At that point, relevant authorities of importing countries (this varies from country to country Customs, in the UK; Department of Agriculture in the USA) will require the presentation of this export permit (along with phytosanitary documents, bills of lading, and other standard documents) before allowing the shipment into the country. Any shipment of a listed species that is not accompanied by the relevant permit would be subject to confiscation. 2. Scenarios for harmonisation While this procedure is not unduly onerous, for trade in FSC products it could be simplified in two ways, with the cooperation and agreement of relevant parties. (i) Harmonisation at national level. The CITES Management Authority of a given Party could determine that the principles and criteria applied in FSC certified forest management fulfilled the requirements necessary for the granting of an export permit. Examination of FSC Principles and Criteria strongly support the validity of this proposition. CITES Management Authorities could then automatically issue export permits to shipments of wood products from FSC certified sources, relieving these of regulatory burdens and time delays. (ii) Harmonisation within CITES. An alternative, more speculative, mechanism for streamlining these systems could take place through formal mechanisms agreed by Parties within the CITES forum, with automatic effect for all Parties to the Convention. Listing of species in the Appendices can be accompanied by Annotations, which typically specify certain further limitations or exceptions to trade in these species, such as quotas, range restrictions or type of products. It is plausible that the listing of a timber species in Appendix II could be accompanied by a specific Annotation referring to timber from FSC certified sources. Annotations could, for instance, exempt wood products from FSC certified sources from normal Appendix II requirements, effectively using FSC as a proxy to fulfil the requirements for trade in Appendix II listed species. This would be an innovative move in the Convention and the implications (for other taxa and issues) would need to be carefully thought out, but would promote substantial complementarity between the two systems. 20/09/02 8

9 WWF s mission is to stop the degradation of the planet s natural environment and to build a future in which humans live in harmony with nature, by: - conserving the world s biological diversity - ensuring that the use of renewable resources is sustainable - promoting the reduction of pollution and wasteful consumption. WWF International Species Programme Panda House, Weyside Park Godalming, Surrey GU7 1XR, UK information@wwf-species.org 20/09/02 9