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Illegal logging issues and solutions: Five questions for Alison Hoare, Chatham House

Illegal logging in the lowland rainforest. Loggers with illegally cut, highly quoted cedro tree (Cedrela odorata). Lowland rainforest along the Rio Las Piedras, near the Alto Purus Reserved Zone, department Madre de Dios, Peru.

Chatham House, otherwise knowns as the Royal Institute of International Affairs, is an independent policy institute based in London. They have an excellent unit on illegal logging and timber and recently produced a new report on the topic looking nine countries.

The microsite for it is here, their main site is here and the executive summary (well worth a read) is here.

Key findings

  • Efforts to address illegal logging and reduce the trade in illegal timber have borne fruit and prompted some positive reforms in producer countries. However, changes in the sector mean overall trade has not fallen in the last decade.
  • China is now the world’s largest importer and consumer of wood-based products, as well as a key processing hub, accounting for half of all trade in illegal wood-based products.
  • India, South Korea, and Vietnam are also growing markets. The rise in demand from developing countries has diluted the influence of more progressive countries, such as the EU and US.
  • Additionally, more forest is being cleared for agriculture and other land uses. As much as half of all tropical timber traded internationally now comes from forest conversion, of which nearly two-thirds is thought to be illegal.
  • Finally, logging by small-scale producers has soared in many countries. Such activity is often illegal and remains beyond the scope of many policy and regulatory efforts.

    (Innovation Forum’s Singapore business conference on this topic will be held on 28-29 Sept, go here for more information. Our London version will be announced shortly and is on 2-3 November. Contact: Charlenne.Ordonez@innovation-forum.co.uk for more information on either event)

Hoare, Alison Crop-1

Alison Hoare, Chatham House

I sent lead researcher Alison Hoare five questions based on the new research. She responds below.

1) Your new report notes that “In 2013 more than 80 million cubic metres (m3) of timber – as measured by roundwood equivalent (RWE) volume – were illegally produced in the nine producer countries ((Brazil, Cameroon, the Democratic Republic of the Congo [DRC], Ghana, Indonesia, Laos, Malaysia, Papua New Guinea [PNG] and the Republic of the Congo) in this assessment. This is equivalent to nearly one-third of their total production of timber” and also that “at the global level progress has stalled” despite coinciding “with ambitious government action to tackle illegal logging”. So what are the headlines from your new report on the global picture?

The 9 producer countries that we included in the study are amongst the world’s major producers of tropical timber, accounting for nearly two thirds of global exports, and so they give a good idea of what is happening. The picture presented by these countries is that there has been little change in levels of illegal logging at the global level, with serious implications for efforts to tackle climate change and achieve sustainable development.

While far from positive, this is not to suggest that current efforts are not working. Rather, the gains that have been made in reducing illegal practices have been eclipsed by changes in the forest sector; in particular, the growth of illegal small-scale production and of illegal forest clearance for other land-uses; as well as an increase in demand from emerging markets, particularly China. Approaches taken to date have tended to focus on the large-scale sector at the expense of the small-scale, and have also given insufficient attention to the drivers of deforestation. In the coming decade, much greater priority needs to be given to both these aspects to establish a legal and sustainable forest sector, and other consumer and processing countries beyond the EU and US will need to do more to prevent the trade in illegal timber.

2) You note that Measures to eliminate illegal timber imports into the EU and the US have had a positive impact, but the bulk of illegal trade is now to other countries. In 2013 volumes of illegal wood-based products imported by the US fell by one- third compared with their peak in 2006. In the case of the three EU countries in this assessment, volumes halved over the same period. Meanwhile, the quantity of illegal products imported by the emerging economies of China, India and Vietnam increased by over 50 per cent. This shift renders the policies of the EU and the US (so-called ‘sensitive’ markets) less influential. So how should companies and policymakers respond to this trend?

CH20report20cover-1Much of the growth in demand for timber in the emerging economies is to supply processed products to consumers elsewhere, including the EU and US. For example, China is now one of the main suppliers of wooden furniture to the EU and US. Therefore, the legislation in these countries is still influential and supporting its effective implementation should remain a priority for both policy makers and companies.

However, action is also needed in these emerging markets if illegal logging is to be significantly reduced, not least because much of what they import is for their own growing domestic markets. Global trade in illegal wood-based products could be slashed by nearly two-thirds if China, India and Vietnam were to reduce their illegal imports to the proportions seen in the US and EU. These countries can learn from EU and US reform efforts and should be encouraged to go further in their efforts to cooperate with others to reduce demand for illegal timber.

3) The vast majority of illegal timber in 2013 came from Indonesia (around 50 per cent), Brazil (25 per cent) and Malaysia (10 per cent). This in part reflects the size of these countries’ forest sectors. Other countries are catching up. What measures can and should these countries take to prevent illegal exports, and what can big companies and other nation policymakers do to support these efforts and make them successful?

Preventing illegal exports depends on making significant improvements to forest governance. Progress is being made in this area, including in Indonesia, Brazil and Malaysia. However, corruption remains a major problem in many countries and is undermining reform efforts. Improving transparency is necessary to tackle this. Governments need to make much more concerted efforts to make forest sector information available: on the legal framework and policy-making processes, resource-allocation decisions, enforcement activities, and on production and trade data. In parallel with this, civil society needs to be able to to use such information and hold their governments to account. This means that governments must ensure civil society organisations have the freedom to operate, and that there are mechanisms in place to address complaints.

Big companies can support these efforts through making clear commitments to source only legal products, and being transparent about how they are striving to achieve this (as many are already doing). Greater transparency is also a crucial element here – enabling both governments and civil society to monitor their activities.

Policy-makers in other countries can support reform efforts through ensuring the effective implementation of existing measures to reduce the trade in illegal timber – most notably, the EU Timber Regulation and US Lacey Act. Equally important, they need to ensure the coherence of all their policy interventions – for example, that trade agreements, aid or subsidies do not inadvertently drive increased illegal logging or forest clearance.

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4) You also note that “The proportion of forest verified as legal or certified as sustainable has increased significantly since 2000. This corresponds to a decline in illegal practices relating to the allocation and management of large-scale forest concessions for selective logging. Furthermore, unlicensed large-scale logging is now less prevalent in many countries, particularly in Brazil and Indonesia. However, these gains have been offset by increased illegal timber production from forest conversion and from informal small-scale logging.” What can and should be done about this?

In many countries, deep-seated reform will be necessary to tackle both of these issues and they will take time and political commitment to address.

Reducing illegal forest conversion will require improvements to land-use governance, including the establishment of clear and equitable processes for allocating concessions, and effective law enforcement. The significant reductions in rates of deforestation seen in Brazil over the previous decade demonstrate what is possible when there is a real desire to bring about change.

Similarly, establishing legal small-scale logging will require a high level of political commitment to rebalancing the sector in its favour. In many countries, small-scale logging has long been impeded by complex legal requirements and a lack of investment, resulting in high levels of illegality. Overcoming this will require a range of interventions, including legal reform, comprehensive strategies for capacity building, improving access to information, and the provision of affordable credit. As shown by the experience of Ghana, where considerable effort has been put into tackling illegal chainsaw milling, consideration of the social context is also essential. Here, the development of alternative livelihood opportunities is an important part of the government’s strategy to reduce illegal chainsaw milling.

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5) China is now getting an increasing amount of blame for sourcing illegal timber. Do you really see mechanisms such as EU’s voluntary partnership agreements (VPAs) being successful in the world’s second largest economy?

The first point to note is that China is not entirely to blame for sourcing illegal timber. As noted above, much of the country’s timber consumption is to make wood products for export to other countries and the demand for cheap products in these latter countries is also driving this illegal trade. However, this is not to say that China can shirk all responsibility.

As to the possibility of a mechanism such as the VPA being successful, the fact that China is the world’s second largest economy could work in favour of such an approach, as the incentives for its trading partners to negotiate such an agreement would be very strong.

However, experience from the EU’s VPAs highlights that for such a mechanism to be effective, there would have to be a strong commitment to multi-stakeholder negotiations – both on the part of China and the partner country. This has been the feature of the EU VPAs that has enabled many of the governance improvements achieved to date. Close coordination with the EU VPAs would also be essential, where countries were already engaged in these, to avoid creating an unnecessary burden for partner countries and the duplication of effort.

 

(Innovation Forum’s Singapore business conference on this topic will be held on 28-29 Sept, go here for more information. All the leading companies, suppliers, brands, NGOs and other experts, including government, will be there. 

Our London version will be announced shortly and is on 2-3 November. Contact: Charlenne.Ordonez@innovation-forum.co.uk for more information on either event)

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