Summary
• The EU Timber Regulation poses challenges for African suppliers.
• No African government can yet attest legality of all its timber.
• Two million ha of Gabonese forest are being exploited in contravention of law.
• Africa needs more forest specialists.
• First FLEGT VPA signatory Ghana is working on a timber licensing system.

The EU Timber Regulation (EUTR) which comes into force on March 3, 2013, will have a widespread impact on the trade in timber products between African countries and European markets.

The legislation is designed to limit illegal logging, although there is as yet no accepted international legal definition of legal timber. Consequently, the new regulation places the responsibility on purchasers to ensure that all of the links in the supply chain respect national laws in the country where the timber is harvested. This will present complications on many levels, including those related to political stability.

The EUTR, similar to the Lacey Act in the US, introduces a prohibition that makes it a criminal offence to place illegal timber on the market. It additionally obligates the first placer of timber, whether imported or domestic, to undertake due diligence to assess the risk that illegal timber entered the supply chain.

Due diligence

The exact terms of the due diligence requirements will be set out in implementing legislation that is due to be approved by the European Union by June. The three prongs of the due diligence requirements are information, risk management procedures and risk mitigation procedures. When the first two procedures reveal a risk of illegality, companies must take steps to address such risks. This is especially important in relation to African timber, as no government on the continent yet claims to have the ability to attest to the legality of all the timber harvested on its territory.

National forestry authorities in many African countries do not have the resources or expertise to enforce relevant legislation, meaning that illegal logging can often go unnoticed for protracted periods. A January 2012 report from the International Union for the Conservation of Nature (ICUN) found that the Gabonese government had done little to stop Chinese firms from cutting trees smaller than the legal minimum size. The ICUN found that

2 million ha of Gabon’s forest are currently being exploited by Chinese companies in contravention of Gabonese law. These firms have not submitted legally mandated development reports and the relevant legislation states that the companies have now forfeited their claims to these licences – though this has not been enforced.

The often unsteady pace of change means that companies have to be especially attentive to changes in national law and policy. For example, in 2009 the new government in Gabon launched prohibitions on the export of unprocessed logs. There has long been an absence of effective forestry regulation in Cameroon, but the government suspended 27 companies’ forestry permits in early March 2012. Some of the companies involved blamed corruption in the awarding of contracts as a cause of illegality in the sector.

African permits

Many African forestry contracts were signed years ago, but the EUTR will make companies responsible for verifying that existing contracts were made without undue influence or illicit payments.

A July 2008 report sponsored by the European Union highlighted the fact that a major cause of concern is the management of small and familial permits in central Africa. Because of their size and the lack of oversight of the sector, it is very difficult to trace timber from these licences.

The new EU law dictates that companies will have to rely on due diligence and risk prevention strategies in order to respect the EUTR, but that in itself will present its own set of problems. The Center for International Forestry Research reports that there are too few forestry specialists in central Africa, especially the Democratic Republic of Congo, and that national forestry data is often of poor quality, making it difficult to use in order to determine respect for forestry laws.

The 2008 EU-supported study also suggests that timber production statistics are likely to be systematically under-reported, leading to revenue losses for governments and creating another facet of a wide definition of illegality.

The renewed focus on sanctions for illegally exploited timber will also bring greater attention to the issue of political stability in some of the continent’s more conflict-prone states. When a coup led to a change in government in Madagascar in March 2009, this prompted sanctions and a lack of international recognition for the new regime. As the country’s economic isolation worsened, there was a rise in illegal harvesting of rosewood and ebony from sites, including national parks.

As with the case of Côte d’Ivoire, timber purchasers may be inclined to write off entire countries during times of political crisis due to the lack of tracing mechanisms and the unreliability of government assurances on monitoring.

In a different initiative that has its own licensing initiative in order to exclude illegal timber from European markets, the European Union has signed several Voluntary Partnership Agreements (VPAs) under its Forest Law Enforcement, Governance & Trade (FLEGT) initiative with African and other countries.

They have so far been signed by Cameroon, the Central African Republic, the Democratic Republic of Congo, Gabon, Ghana, Liberia and the Republic of Congo, although none as yet have the full licensing system in place and so are not in a position to deliver timber under the scheme.

Voluntary Partnership Agreements

The EU’s intention is that the Timber Regulation and the FLEGT Voluntary Partnership Agreements are to function in a complementary fashion, with the penalties of the EUTR encouraging countries to sign VPAs. The VPAs involve the creation of a licensing framework based on the laws of the particular producing country and will be a way to demonstrate legality outside the due diligence framework of the EUTR.

The first African country to sign a VPA was Ghana and it says it now plans to put a nation-wide licensing system in place before the Timber Regulation comes into force.

But the ongoing question mark over these measures too, of course, is their reliance on African governments’ monitoring capacities, which have as yet not always proven adequate.

The EUTR is a challenge to companies in the same way as the US Foreign and Corrupt Practices Act and the UK Bribery Bill. Ignorance is no defence, and the onus is squarely on importers to show compliance. However, issues like this are dealt with every day in other sectors, and it is always possible to obtain an informed assessment that will guide the buyer either to import with confidence or to walk away from the relationship.

Note: all images on this page are from companies with independent third-party environmental certification