Summary
• The principal activity of FLEGT is the Voluntary Partnership Agreement.
• The EU funds private sector schemes such as the TTF Timber Trade Action Plan.
• The second reading of proposed EU legislation is under way, leading to a parliament vote in early July.

The EU’s Forest Law Enforcement, Governance and Trade Action Plan (FLEGT), approved in 2003, recognised that both consumer and producer countries have roles in mitigating illegal logging.

The Plan (AP) involves a number of key activities. The principal one is the Voluntary Partnership Agreements (VPA) between the EU and producer countries. These involve the EU supporting that country to improve forest governance and combat illegal logging, ultimately leading to a credible legality licensing system for timber products. To date, three countries have signed such agreements: Ghana, Republic of Congo and Cameroon. Others are in negotiation or expressing interest, including Malaysia, Indonesia, Vietnam and Liberia.

The EU is also funding private sector efforts that meet FLEGT objectives. One of the largest and most successful of these is the Timber Trade Federation’s (TTF) Timber Trade Action Plan (TTAP) which is managed and advised by The Forest Trust, with the funds contributing 72% of the cost to support a mill in verifying its supply chain.

The AP also encourages EU states to adopt timber public procurement policies, like the UK’s. It also urges financial institutions to consider environmental and social factors in forestry investments.

EU legislation

The AP also involved a review of EU legislation to curb the illegal timber trade, and in late 2008 led to the first draft of a proposed new law that timber businesses exercise due diligence to minimise the risk of handling illegal wood.

The adoption of EU laws is not a simple process. While the European Commission proposes new law, it is the Council and Parliament that pass them. Essentially it is a negotiation process, hence the fact that the first draft of this new legislation came out more than 18 months ago and the Council of Ministers only adopted its position on it at the beginning of March this year!

The ministers next consulted the European Parliament and, in response, it has just published a new set of proposed draft amendments. Over the next few months the various bodies will try to reach a compromise in a second reading process, leading to a parliament vote in early July. If an amended proposal comes out of this, it will be considered by the Council before November and, if it accepts, then be signed into law. If it’s rejected a final process called “conciliation” will take place. And if it finally makes it into law by the end of 2010, member states then have around two years to implement it.

Current position

As it stands, the regulation requires all importers and home producers who first introduce the timber products to the market to undergo an environmental risk assessment, a so-called due diligence process, to limit the possibility of illegal wood entering their supply chain. Following the Parliament’s amendments there are now a few key points up for negotiation.

The first of these is the possible inclusion of a prohibition to make it an offence to bring illegal products into the EU. The Council failed to get a majority on this, but there’s still support from some states, which seems to have strengthened recently. This prohibition, say its backers, would level the playing field and provide a platform to build on the environmental credentials of timber.

There are slight differences in interpretation of how it should work, however. The TTF is broadly in line with the UK government’s line: that the prohibition sits behind the due diligence system, with the onus on the prosecutor to prove timber is illegal.

The parliament also wants all timber products to be labelled with the origin of timber and species. But European forestry and timber federations oppose this as impractical, costly and unworkable.

It is also proposed not just to include legality issues relating to the right to harvest in the new EU law, but wider sustainability topics, including social issues such as health and safety and welfare rights in the timber producing country. The TTF, like the European Council, believes this is laudable, but not workable and only demonstrable through certification.

Supply chain

The Parliament also wants to extend the regulation to everyone in the supply chain, not those who first bring the material into the EU. This would spread responsibility all the way through to end users and many in the forestry and timber sectors see it as over-burdensome. Again, along with the Council, they want to stick to applying the law to those who initially place timber on the European market.

At present, the regulation will class FLEGT-licensed and CITES timber as low risk. Many trade and industry representatives are now lobbying for timber backed by certification to get the same status as these are already independently assessed and audited.

I’m hopeful that a consensus between Council and Parliament will be reached, despite their positions currently being poles apart. If the illegal timber prohibition goes through, then the Parliament might be willing to drop some of its other more unrealistic requirements.

We will learn more in coming weeks on what the final text will look like. In the meantime the TTF and the Confederation of Forest Industries will continue to lobby on behalf of the UK timber trade and forest sectors.