The Malaysian Timber Legality Assurance System, or MYTLAS, has been operational for six months and our timber industry has made the transition to its demands well.
The initiative grew out of Malaysia’s work towards an EU Forest Law Enforcement, Governance & Trade Voluntary Partnership Agreement (FLEGT VPA), which involves establishing a legality assurance system (LAS) for timber and wood products from Malaysia as a whole; Peninsular Malaysia, Sarawak and Sabah. This, of course, will give the country preferential access to the EU, with its proven legal FLEGT-licensed products bypassing the due diligence risk assessment requirements of the EU Timber Regulation (EUTR).
The country-wide LAS work is still in progress, in a project the Malaysian authorities are taking extremely seriously, but it was decided that the timber sector in Peninsular Malaysia was ready to adopt a system ahead of the FLEGT VPA schedule. The result is MYTLAS, which effectively launched in February, complete with a Co-ordination Committee (IACC), which oversees the enforcement activities of the eight implementing agencies in communication with the Licensing Authority, and independently developed guidelines and checklists for auditing the whole system.
It was undoubtedly the implementation of the EUTR in March that provided the impetus to get the system up and running as effectively and quickly as possible. MYTLAS does not have FLEGT VPA status, but is designed to help European customers put our timber and wood products through EUTR due diligence.
Malaysia already has 4.65 million ha of natural forests certified sustainable under the PEFC/MTCS scheme. These areas, all gazetted Permanent Forest Reserves, were of course already experienced in operating chain of custody systems, so were relatively fertile soil for implementing the MYTLAS. However, the scheme also had to encompass non-gazetted forests, such as alienated and stateland forests, which are not subjected to the same rules of sustainable forest management. Here putting in place MYTLAS’s required legality chain of custody mechanisms and ensuring they were in line with the requirements of EUTR due diligence procedures demanded significantly more resources and personnel. It put tremendous pressure on the forestry authorities and the other implementing agencies.
It is very encouraging that timber federations in certain EU member states – key markets for Malaysian timber products – have already acknowledged the value of MYTLAS in assisting member companies satisfy EUTR requirements, particularly those which are ‘operators’, first placing timber on the EU market.
The MYTLAS licence, they say, has been instrumental in providing the necessary details on forest source and other key EUTR due diligence elements for most Malaysian products. This is not to say that Peninsular Malaysian companies now face no issues or challenges regarding the EUTR.
All Malaysian exporters of secondary, tertiary and processed products, like most EU manufacturers of such goods, certainly find it burdensome accounting for all the different timber species used, particularly if the processing chain uses off-cuts from sawmills or manufacturers of other products. Furniture is another sector voicing difficulties in satisfying EUTR due diligence requirements, echoing feelings in the European furniture industry. Some compromise is needed in these areas so that the entry of products from more responsible countries, such as Malaysia, is not impeded, which would only result in the loss of market share for both Malaysian and EU businesses. It is also disheartening for the Malaysian industry that most EU FLEGT VPA partner countries, and others still in negotiations, are tropical. This has inadvertently created the perception that the EUTR is implicitly targeted principally towards tropical countries, which are not yet ready to supply FLEGT-licensed timber. That also helps create the impression that these countries run a higher risk of illegality, an unfounded notion that has caused some purchasers in the EU to demand almost the impossible from tropical timber supplying countries, in terms of depth and detail of chain of custody and other information.
At the same time as tropical countries are redoubling their efforts to shake off this market misconception and meet the highest standards of legality assurance, some large competing suppliers to the EU, which have not joined the VPA process, go virtually unregulated. The BRIC countries immediately spring to mind, two of which deal in tropical timber products, despite having no tropical forest resources.
We believe that the EU also needs to bolster its own efforts to ensure uniform implementation and enforcement of the EUTR across the EU. There is currently huge disparity from state to state, which risks undermining the work done in supplier countries to achieve the required legality assurance standards. All stakeholders need further information and guidance on their rights and obligations under the EUTR, and tropical timber supplying countries, which have invested millions in meeting market requirements, deserve better than to continue to be seen as high-risk operators outside the law. Their commitment to meeting the demands of the EU market need to be recognised and rewarded.
For our part, Malaysia will continue to raise awareness of MYTLAS and our efforts towards achieving our FLEGT VPA.
