Combating Illegal Logging and Enhancing Biodiversity in Japan s Paper Industry Feburuary29,2016 University of Kyoto Kiyoshi Kamikawa Japan Paper Association 1
In July 2005, at a G8 Summit held in Gleneagles, the U.K., developed countries around the world formed an agreement to create measures that address the problem of illegal logging. Following this agreement, the Government of Japan amended criteria concerning wood-based products under the Green Procurement Law. The amendment went into effect after April 2006, making the Law require timber suppliers of government institutions to supply timber that has been verified its legality. 2
The EU also created Regulation (EU) No 995/2010 of the European Parliament and of the Council of 20 October 2010 laying down the obligations of operators who place timber and timber products on the market in 2010. Following the establishment of this Regulation, it is prohibited to sell illegally-harvested wood or forest products made from such wood within the EU from March 2013. In addition, Australia has passed Illegal Logging Prohibition Bill, very similar to EU Timber Regulation, at the national Parliament in 2012 and has come into effect from 2014. 3
Furthermore, the United States has amended the Lacey Act in 2008, as part of its anti-illegal logging measures. Following the amendment, exporters of wood products, including paper, now have to make a declaration with regard to a country of origin where wood is harvested and tree species, as well as product name, price and quantity (However, the obligation of the declaration is not applicable to paper pulp at the point of writing this document). 4
Combating Illegal Logging Japan Paper Association (JPA) pledges to combat illegal logging, one of the major causes of deforestation worldwide. JPA set up the code of actions against illegal logging in 2006. (100% not illegal confirmed) Japanese paper companies set up their own codes of procurement and collect traceability reports from all suppliers. In addition, JAP audits Japanese paper companies actions of confirming legality. 5
Prior to this, Japan Paper Association developed The Code of Action for the Japan Paper Association Regarding the Illegal Logging Problem in March 2006. The Code of Action is designed clarify the Association s commitment to have the entire industry commit to the elimination of illegal logging. The Association also amended The Voluntary Action Plan Regarding the Environment in March 2007, incorporating the anti-illegal logging measures as part of the Voluntary Action Plan. In 2014, the Voluntary Action Plan was terminated and The Action Plan Regarding the Environment has been newly set up, also incorporating the antiillegal logging measures as part of it 6
The Forestry Agency issued the Guidelines, under the green procurement law, concerning verification methods of anti-illegal logging measures, which specifies the following three verification methods: (1) Verification method via forest certification system (2) Verification method by company under the authorization of associations for forest owners, forestry or wood industries (3) Verification method by original measure of each company 7
Verification method by company under the authorization of associations for forest owners, forestry or wood industries (2014) Categories Round wood (production) Round wood (distribution) Forest products (production) Forest products (distribution) Domestic /Import Total Volume (1,000m3) Volume verified as legal (1,000m3) % Authorized companies Domestic 12,100 8,578 71 1,910 Domestic 15,155 10,231 68 532 Domestic 25,286 14,527 57 2,957 Domestic 25,215 9,991 40 3,145 Others Domestic 264 170 64 14 Round wood Import 2,042 1,223 60 3 Forest products Import 6,415 993 15 33 8
The paper industry has adopted method (3) above ( Verification method by original measure of each company ), and since April 2006, member companies of the Japan Paper Association have been implementing their own measures for tackling illegal logging issues. For the implementation of verification method, some companies are using method (1) or (2) above at the same time ((1) Verification method via a forest certification system ; (2) Verification method by company under the authorization of associations for forest owners, forestry or wood industry ). 9
Legality Verification System of JPA Loggers Supplier Paper Companies Wholesalers Users Import Domestic Loggers Traceability Report Chipping Mills Authorization Certificate Audit Associations (Code of Action) Japan Paper Association (Code of Action) 62
Furthermore, since 2007, the paper industry has been stepping up its effort to address the illegal logging problem by implementing the The Monitoring Operation for Anti-Illegal Logging Measures. This operation includes monitoring by the Japan Paper Association, for which guidance, advice and auditing are provided by a third-party committee consisting of academic experts, consumer groups, those involved with auditing corporations, and other similar groups. 11
Auditing Committee Members Shin NAGATA Professor, Graduate School of Tokyo University Akihiro OHNUMA All Japan Stationery Association Kazuya KOUJITANI Green Purchasing Network Satoshi TACHIBANA Associate Professor, Graduate School of Tsukuba University Kyoko NOMURA Price Waterhouse Coopers 12
In February 2009, criteria concerning photocopy papers under the Green Procurement Law were amended. Prior to the amendment, the paper for public procurement had to come from 100% used paper, but as a result of this amendment, it can now include virgin pulp up to 30% provided that such pulp originates from wood from thinning operation, or certified wood. Other types of wood that was produced in a sustainable manner is also allowable. For these, paper companies decided to use The Monitoring Operation for Anti-Illegal Logging Measures mentioned above, whilst also confirming environmental and social superiority of relevant forests through the implementation of procurement policies or the production of traceability reports, in order to meet the criteria under the Law. 13
Future Development of JPA s Anti-illegal Logging Measures 10 years have passed since JPA has started its own anti-illegal logging measures. Besides, the law for the promotion of legal wood procurement ( Japan s version of antiillegal logging law) would be enacted soon before Ise-Shima Summit held in Japan coming May. JPA has now been considering the improvement of its anti-illegal logging measures, introducing Due Diligence system, so as to satisfy the requirements of EU Timber Regulation, Lacey Act and Australian anti-illegal logging law. 14
Paper and Paperboard Production of Japan Japan is the third largest paper and paperboard producing country in the world. Paper and paperboard production of Japan dropped by minus 14.2% from 30,625 thousand tons in 2008, to 26,268 thousand tons in 2009 due to Lehman shock. It was back to the level of a quarter of century (26 years) ago (1988). Since then, the level of paper and paperboard production has been floundering around 26 million tons ( 26,241 thousand tons in 2014). The production of paper continues to be decreasing due to IT revolution (15,118 thousand tons in 2014). On the other hand, the production of paperboard has been rather stable (11,360 thousand tons ), in proportion to GDP. 15
World Paper & Paperboard Production in 2014 USA China Germany Japan 分類 1 Sweden S,Korea Canada Finnland Brazil Indonesia 0 20000 40000 60000 80000 100000 120000 China USA Japan Germany Sweden S.Korea Canada Finland Brazil Indonesia Source: RISI 16
Trends in paper & paperboard production ( 1000 metric ton) 32,000 30,000 28,000 26,000 24,000 28,518 31,828 31,014 30,717 30,95131,106 31,266 30,631 30,686 30,892 30,012 29,659 29,886 30,457 30,627 Paper&Paperboard Production 26,268 27,363 26,57926,478 26,241 25, 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 Paper Production 19,037 17,466 17,767 18,267 18,393 18,528 18,78818,900 19,062 19,192 17,855 18,385 18,396 18,828 16,387 16,602 15,430 15,182 15,831 15,067 Paperboard Production 12,193 12,245 12,747 12,791 12,238 12,332 12,031 12,158 12,10312,051 12,074 12,061 12,044 10,976 11,149 11,916 11,800 11,059 11,360 10,436 10,890 94 95 96 97 98 99 2000 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15, Source : Japan Paper association 17
Paper and paperboard production by grades (1000 metric ton : % ) 2008 2009 2014 Production 08/ 07 Production 09/ 08 Production 09~ 14 Newsprint paper 3,680 96.8 3,455 93.9 3,134-1.9 Printing and writing paper 11,501 98.6 9,120 79.3 8,491-1.4 Packaging paper 1,010 101.6 786 77.8 905 +2.9 Sanitary paper 1,805 102.0 1,776 98.4 1,766-0.1 Other paper 831 86.4 695 83.6 821 +3.4 Paper total 18.828 98.1 15,831 84.1 15,118-0.9 Container board 9,219 97.8 8,213 89.1 9,096 +2.1 Boxboard 1,879 101.0 1,637 90.0 1,593-0.5 Other paperboard 762 89.7 586 76.9 672 +2.7 Paperboard total 11,800 97.7 10,436 88.4 11,360 +1.7 Total 30,627 98.0 26,268 85.8 26,478 +0.2 Source : PRPC 18
Imported Pulp from Market Pulp Natural 6.2% Wood 3.5% Pulp from Sawmill Residue Raw Materials Contents(2013) Others 0.1% Pulp from Planted Wood 19.7% Recovered Paper 63.9% 19
Consumption of Recovered Paper Japanese paper industry has achieved the highest level of recovered paper utilization rate in the world. Utilization rate in 2014 is 63.9% (paper 40.3%,paperboard 93.2%) Consumption of recovered paper is 17,224 thousand tons in 2014. Japan Paper Association (JPA) has set up the utilization rate target of 64% by the year 2015 in Environmental Action Plan with great efforts and almost achieved that target. JPA has been reviewing the existing target and now in the process of setting up the new target for the year 2020. 20
Recovery rate of Recovered Paper Recovery rate of recovered paper is also at the highest level of 80.8% in 2014, which is due to the effectively sorted collection system deeply rooted in the Japanese society. Collection of recovered paper is 21,751 thousand tons in 2014. We have a large amount of surplus of recovered paper and export a lot to China. 21
Recovery rate & Utilization rate of recovered paper (%) 80 78 76 74 72 70 68 66 64 62 60 58 56 54 52 50 48 (56.1) 55.2 (53.3) (53.4)(53.6) (54.0) 55.7 (54.9) 51.7 51.5 51.3 53.0 Recovery rate 57.7 61.5 (58.0) (57.0) 65.4 66.1 68.5 71.1 72.4 74.5 75.1 79.7 (63.1) (61.4)(61.9) (59.6) (60.2)(60.4)(60.3) (60.6) Utilization rate 77.9 78.2 (62.5) 79.9 (63.7) (63.0) 63.9 94 95 96 97 98 99 2000 01 02 03 04 05 06 07 08 09 '10 11 12 13 14 (6 Source:PRPC 22
Woodchip Consumption of Japan Woodchip consumption of Japan dropped by minus 20% from 19,086 thousand tons in 2008 to 15,294 thousand tons in 2009 due to Lehman shock.(consumption of imported woodchips dropped by minus 23.6% to 897 thousand tons) Woodchip consumption of Japan recovered by 11% to 16,992 thousand tons in 2010. It went down again to 15,593 thousand tons in 2012. But it has increased a little by two consecutive years to 16,489 thousand tons in 2014, even though it is still at a rather low level. 23
(thousand BDT) 25000 Consumption of Woodchip 20000 19187 19229 19363 19086 15000 15294 16992 16280 15593 15967 16489 Import Hardwood Import Softwood 10000 Domestic Hardwood Domestic Softwood 5000 0 05 06 07 08 09 10 11 12 13 14 Source: Japan Paper Association 24
Pulpwood Market Situation ( 2014 ) items consumption (unit:1000bdt % the ratio over the previous year) supply domestic import total % % % % pulpwood total 16,488 103.3 4,909 97.0 11,409 107.5 16,318 104.1 softwood log 127 94.0 125 99.1 125 99.1 hardwood log 21 94.6 21 95.5 21. 95.5 softwood chip 5,093 103.6 3,427 98.1 1,651 121.7 5,078 104.7 hardwood chip 11,247 103.2 1,336 93.9 9,758 105.5 11,094 103.9 (reference) consumption softwood ratio over the previous year : 103.3% supply hardwood ratio over the previous year : 103.2% softwood ratio : 31.9% hardwood ratio : 68.1% Source:Japan Paper Association import ratio : 69.9% ( softwood : 31.7% hardwood : 25
Thousand BDT 14,000 12,000 10,000 8,000 6,000 Hardwood Hardwood Total 11,312 Hardwood Total 11,152 Hardwood Total 11,094 Others Others Brazil, 582 Brazil, 573 Thailand, 613 Thailand, 766 Vietnam, 1,066 South Africa, 1,410 Chile, 2,345 South Africa, 1,415 Vietnam, 1,620 Chile, 2,572 Others Brazil, 810 Thailand, 834 South Africa, 1,112 Vietnam, 2,418 4,000 Chile, 2,054 2,000 Australia, 3,512 Australa, 2,581 Australia, 1,812 0 Japan, 1,531 Japan, 1,422 Japan, 1,336 2,000 4,000 6,000 Softwood Japan,3,425 Japan, 3,389 Japan,3,427 Australia, 732 USA, 661 USA, 683 USA, 649 Australia, 549 Australa, 502 NZ, 291 NZ, 307 NZ, 315 Others Others Others Softwood Total 5,412 Softwood Total 5,204 Softwood Total 5,078 8,000 2010 2011 2014 26
Trend of Self-Sufficiency Rate of Woodchip (%) 75 Domestic Woodchip (softwood) Softwood 40 (%) Domestic Woodchip (hardwood) Hardwood 70 35 65 30 60 25 55 20 50 15 10 45 5 40 200020012002200320042005200620072008200920102011201220132014 0 200020012002200320042005200620072008200920102011201220132014 Source; Ministry of Economy, Trade and Industry 19
Imports of Woodchip by origin(softwood) The import from U.S. was 684 thousand tons in 2008, and sharply dropped to 369 thousand tons in 2009, but bounced back to 663 thousand tons in 2010. It continued to decrease to 497 thousand tons in 2013 but bounced back to 660 thousand tons (39.1%) in 2014. The import from Australia was 1,087 thousand tons in 2008, and dropped to 598 thousand tons in 2009, but recovered to 731 thousand tons in 2010. It dropped again to 546 thousand tons in 2011, and decreased further to 460 thousand tons in 2012,but bounced back a little to 502 thousand tons (30.2%) in 2014..28
(thousand tons) 1400 Trend of Woodchip Imports by origin (softwood) 1200 1000 Australia 800 600 US 400 200 Canada NZ 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Fiji US Canada Russia Australia NZ Fiji Chile Brazil Source: Ministry of Finance 29
Woodchip Imports by Origin (softwood) <2009> 2014 <2013> 14.6 9.5 5.1 42.4 Australia US NZ Canada 9.8 9.6 7.9 30.2 Australia US NZ Canada Fiji Others 39.7 Fiji Others Source: Ministry of Finance 30
Woodchip Imports by Origin (hardwood) The import from Chili was 2.350 million tons in 2008 and dropped a little to 2.238 million tons in 2009 and up again to 2.377 million tons in 2010. It went up to 2.590 million tons ( 27.0%) as No.1 in 2012, but went down to 2,033 million tons (20.3%) as No.2 in 2014 The import from Vietnam was 1.071 million tons in 2008 and dropped to 0.809 million tons in 2009 and up to 1.064 million tons in 2010. It jumped up to 2,498 million tons ( 25.0%) as No.1 in 2014. The import from Australia was 4.464 million tons in 2008 and dropped to 3.148 million tons in 2009 but could not recovered to 3.591 million tons in 2010. It continue to decrease to 1,821 million tons ( 18.2%) as No.3 in 2014. 31
Trend of Woodchip Imports by Origin (hardwood) (thousand tons 5000 4500 4000 Australia 3500 3000 2500 S.Africa 2000 1500 1000 500 Chile Vietnam 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 US Australia Indonesia Thailand Vietnam Chile Brazil S.Africa Source: Ministry of Finance 32
Woodchip Imports by Origin (hardwood) <2009> <2013> 2014 3.9 6.4 8.9 16.1 4.1 25.2 35.4 Australia Chili South Africa Vietnam Brazil Thai 8.2 8.4 25.0 8.7 11.1 18.2 20.3 Australia Chili South Africa Vietnam Brazil Thai Others Others Source: Ministry of Finance 33
JPA s Code of Action for Conserving Biodiversity Japan Paper Association (JPA) has set up JPA s Code of Action for Conserving Biodiversity in 2014. In addition to setting up the code, JPA has done the monitoring survey of what member companies have actually done for conserving biodiversity in 2015 and will continue to do so annually in order to improve the performance of conserving biodiversity for each member company. 34
JPA s Code of Action for Conserving Biodiversity Corporate Governance Sustainable Forest Management Responsible procurement Corporate Social Responsibility Social Cooperation 35
JPA s Initiatives for SFM JPA s Environmental Action Plan (established in 2012) We have committed to promote SFM thorough forest certification We have target to expand forest plantation area owned or managed by JPA members at home and abroad to 800 thousand ha by FY2030 to ensure a stable wood supply, as well as to increase forest carbon sinks that help prevent global warming. To read full text of the Action Plan, please visit http://www.jpa.gr.jp/en/ 36
Forest Plantation by JPA Members In its 900Environmental Action Plan, JPA sets the target of expanding the plantation area at home Forest Plantation and abroad Area to 800 thousand ha by FY 2030. 800 700 (1,000 ha) (1,000 ha) 600 500 400 690 690 677 647 652 626 605 607 537 491 506 463 406 426 800 300 275 200 90 00 01 02 03 04 05 06 07 08 09 10 11 12 13 30 37
Promotion of Plantations Overseas JPA has set up the target of expanding the area of plantations owned or managed by Japanese paper companies to 0.8million ha in Japan and overseas by FY2030 under Environmental Action Plan. We have already established 0.479million ha of plantations overseas (34projects) In 10 countries In 2013. The total area of Plantation including domestic ones (0.147 million ha) was 0.626 million ha. The area of plantation overseas has decreased two consecutive years (in 2012 & 2013) due to the decreasing demand for woodchip and climate changes caused by global warming (fewer rain in Australia). Main planting species are Eucalyptus spp. and Acacia spp. with the rotation of 7~10 years. 38
Overseas Forest Plantations by the Japanese Paper Industry Total: 479,000ha (as of the end of 2014) Cambodia 400ha Source: Japan Paper Association 39
Brief History of SGEC Certification Scheme 1.SGEC certification scheme established in 2003 Established as a forest certification scheme, consists of 74 members including forestry, forest industries, environmental NGOs, business societies, academics and so on. 2.Got a membership of PEFC as NGB in 2014 SGEC has accepted as a member of PEFC and has become the National Governing Body of Japan since 29 th July 2014. 3.Application for mutual recognition with PEFC in 2015 Passing through necessary procedures, SGEC s application for mutual recognition with PEFC was submitted to PEFC 27 th March 2015. Waiting for the final decision of Board of Members of PEFC in coming June 2016. 40
SGEC has established principles, indicators and guidelines of FM certification, in a fair and proper way, based on Montreal Process. SGEC has also established guidelines of CoC certification in accordance with those of PEFC. At the same time, 3 certification bodies have already been engaged in certifying forests and forest products under SGEC scheme. 41
Since then, SGEC has remarkably expanded the coverage of forest area certified by FM certification (1,310,663 ha in 2016, 5% of Japan s total forest areas) and the numbers of entities certified by CoC certification (351 in 2016), strongly supported by small-scaled forest owners and forest industries in Japan. This achievement of SGEC apparently surpasses that of FSC in Japan. FSC has 393,243 ha of forest areas certified by FM certification(2016) and 1,050 entities certified by CoC certification(2016). But, FSC has a better recognition as forest certification among forest products users and consumers, because environmental NGOs such as WWF has strongly supported and campaigned. As SGEC has not been endorsed by PEFC (SGEC has applied for the endorsement of PEFC and would be done in coming June.) so far, PEFC has none of forest areas certified by PEFC, but has 190 entities certified by CoC certification in 2016. 42
Forest Certification in Japan Certification Scheme FM Certification (ha) CoC Certification SGEC 1,310,663 351 FSC 393,243 1,050 PEFC --- 190 (February 2016) 43
Forest Certification in Paper Industry (2013) Japanese paper companies have 0.64million ha of their own forests certified by forest certification schemes such as FSC, PEFC and SGEC (independent, only in Japan). Besides, 22.2% of woodchips consumed by Japanese paper companies is certified by CoC. Japanese paper companies choose each forest certification scheme according to its acceptance in each region. 44
Forest Certification Area owned by JPA Members Source:Japan Paper Association 45
The amount of forest-certified woodchips (2013) consumed by Japanese Paper Companies Softwood hardwood total Domes tic Impor t Total (forest certifi cation rate) Source:Japan Paper Association 245 5 250 616 2,610 3,226 861 (17.3%) 2,615 (24.4%) 3,476 (22.2%) 46
Thank you for you kind attention! 47