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Report from
Europe
Europe takes tentative steps out of
COVID-19
lockdown
Timber trading activity across the EU continues at an
extremely low level as countries emerge slowly and
uncertainly from the coronavirus lockdown. Many
companies have temporarily closed or curtailed operations,
pushed back orders and have been asking for longer
payment terms.
A clearer picture of the real impact on European tropical
timber product imports will only emerge with publication
of EU trade data for the first quarter of 2020, expected in
the next few days.
In the meantime, insights on the status of market can be
gathered from reports of remote meetings of European
trade associations and their member companies and of
various other agencies. The following observations draw
particularly on a report of the Members of the Sustainable
Tropical Timber Coalition (STTC) Technical Committee,
issued at the end of April, supplemented where possible by
more recent information from trade association bulletins
and other sources.
Some continuing timber demand from UK construction
sector
In the UK, according to the Timber Trade Federation
(TTF), some importers, distributors and merchants have
suspended business while others are operating at much
reduced levels. Some demand continues from the UK
building sector, which has been one of the first sectors
allowed to reopen subject to new health and safety rules.
However, the latest Construction Purchasing Managers
Index (PMI) for the UK, published by IHS Markit,
revealed the sharpest decline since the survey began 23
years ago, falling from 39.3 in March to only 8.2 in April
as activity drew to a halt due to the virus outbreak March
(a score below 50 indicates contraction).
A big question in the UK timber industry currently is how
requirements for social distancing will impact future
construction output. A briefing circulated by Barbour ABI
suggests that, even as the lockdown is eased, the number
of workers on UK construction sites could be as low as
15% of normal figures in some cases, leading to increased
costs and build times over the next year.
Meanwhile, according to the TTF, DIY sales in the UK are
holding up, which is attributed to consumers undertaking
repair and refurbishment projects while off work. Garden
centres in the UK will be allowed to reopen from 13th
May in one of a range of measures to gradually ease the
lockdown rules as COVID-19 death rates have declined.
However, with the numbers of new COVID-19 cases and
death rates still high, the process of easing the lockdown is
expected to be very slow in the UK. The government has
emphasised that lockdown measures may be reintroduced
if any signs emerge of a second wave of the virus.
UK timber importers say they have asked overseas
suppliers to push back orders by 30 to 60 days but there is
still concern about the build-up of landed stocks at ports,
with companies unable to accept cargoes as their own
storage is full.
A TTF members survey published on 1st May, while
emphasising that the UK timber supply chain is well
stocked overall, also showed that garden products and
plywood are product categories where there may be
shortages. This survey indicated that, compared to last
year, respondents¡¯ sales fell 33% in March and by 66% in
April, while 69% reported their cash flow had decreased
significantly.
Some slightly more positive news emerged from the UK
Confederation of Timber Industries (CTI) latest survey of
the state of the industry published on 12 May. This
highlighted that almost all UK timber businesses expect to
reopen in some capacity before the end of the month. The
third of businesses which never closed will be re-joined by
the rest of the respondents, with most (99%) having either
reopened or planning to during May.
The CTI survey also showed that while only 12% of the
industryare currently operating at maximum capacity,
there is confidence that businesses can quickly ramp up
productivity. Respondents said that, if quarantine
measures were lifted, and in light of recent Government
advice on returning to work, 54% of businesses said they
could return to full capacity immediately, and a further
34% in less than a month.
The CTI survey indicated that manufacturing was the most
affected sector in the timber supply chain, with these
respondents far more likely to have closed for a period
than sawmillers, merchants or other traders.
Wood product manufacturers were also concerned that
lack of access to personal protective equipment could
hamper the return to work.
Germany watched closely as lockdown measures are
withdrawn
Germany is being watched worldwide as the most
successful large European country in halting the spread of
the virus, thanks to a massive testing programme. Three
weeks after the decision of the federal and state
governments to gradually withdraw the coronavirus
restrictions imposed in March, the end of the lockdown in
Germany was largely completed in the first week of May.
On 6th May, Chancellor Merkel, commenting that ¡°we
have passed the first phase of the pandemic¡±, together with
the representatives of the different states of Germany,
announced that shops, factories and many other businesses
could open again largely without restriction. However, a
week later alarm bells are being sounded with the
announcement that infections have accelerated again.
Speaking to the STTC in April, the German trade
federation GD Holz said wholesalers had not at the time
been significantly affected by the pandemic. Whether this
situation would continue depended on the extent of
contraction in the construction sector. But irrespective of
that, for small to medium sized timber enterprises the
situation was described by GD Holz as ¡®catastrophic¡¯.
Although DIY outlets had been allowed to remain open in
some parts of the country and hardware stores continued to
serve B2B customers, many other German retail and other
consumer-facing businesses came to a complete standstill
in the second half of March and in April. Around 85% of
furniture companies in Germany were operating only on a
part time basis during that period.
Key issues now are the speed at which companies can gear
up operations now they are coming out of lockdown, given
massive disruption to supply chains and order books, and
the possibility of lockdown measures being reintroduced
in the event of a second wave of the virus.
A lot of damage has already been done. According to IHS
Markit survey results published on 7th May, Germany¡¯s
construction activity contracted at the steepest pace in
more than ten years in April due to the disruptions caused
by the pandemic.
The headline construction PMI fell to 31.9 in April from
42.0. Although a less dramatic decline than in many other
European countries (see next story), this was the lowest
reading in Germany since the series-record low of 28.9 in
February 2010, when severe bad weather had exacerbated
an ongoing slump in activity caused by the global financial
crisis.
PMI data showed sharp falls in activity across each of the
three broad construction categories ¨C commercial, civil
engineering, and homebuilding - monitored by the survey.
It also showed that new orders at German constructors fell
at the sharpest rate in more than two decades.
Despite falling demand for inputs, supplier delivery times
to the German construction sector continued to lengthen in
April. Confidence towards future activity remained firmly
in negative territory during the month.
Business activity continues in the Netherlands but
timber supplies disrupted
The Netherlands had a less strict lockdown than some of
its neighbours and began its five-phase plan to ease
restrictions further on 11 May. However, the effects even
of this more limited lockdown on the timber sector and
wider economy have been profound.
A report on the ATIBT Fair&Precious (F&P) website in
April stated that Netherlands importers had sufficient
stocks for the short term and ports and road transport had
been designated key sectors and continued to operate.
However, the Netherlands Timber Trade Association
(NTTA), speaking to STTC, said the pandemic was
disrupting timber supplies to the Netherlands from the rest
of Europe and Malaysia and, while imports from Africa
were ¡®reasonably normal¡¯, they were also expected to
decrease. Plywood and other panel products were in also
increasingly in short supply.
NTTA reported the DIY sector continuing to trade well.
Overall timber trade sales, however, are expected to be
well down through the summer.
The virus outbreak has not impacted ongoing construction
projects in the Netherlands as activity has continued
subject to health and safety restrictions. However, the
worsening economic outlook is expected to weigh down
on construction industry output growth. The number of
construction projects is decreasing, with the NTTA
mentioning forecasts of a 50% fall in new home building.
At the same time, activity in the renovation sector has
reduced by 80%.
According to a business confidence index published by
Statistics Netherlands in early May, the confidence of
entrepreneurs in the Dutch wood and building materials
industry has declined sharply: the balance fell from +1.5 in
March to -25.2 in April 2020, by far the largest decrease
ever recorded.
Belgian timber industry calls for measures to avoid
economic collapse
In an open letter issued 24 April, Belgian importers,
traders and processors of wood, via their trade association
Fedustria, called for political leadership to prevent the
collapse of the economy and prosperity. Fedustria
represents the Belgian wood, furniture and textile industry.
According to Fedustria, the sector generates a turnover of
approximately €10 billion and employs 38,000 people in
more than 1,700 companies.
In their open letter, the companies indicate that they are
concerned about the health of their employees and their
organizations.
They have been struggling with large turnover losses for
some time now due to the loss of demand and the closure
of, for example, home and interior shops. In addition, there
are problems in the supply of raw materials and logistics.
This resulted in high temporary unemployment: in the
furniture industry it is 72% and in the wood processing
industry at least 48%. Fedustria points to liquidity
problems that are becoming increasingly difficult to
bridge.
The companies requested political moves to quickly restart
the economy, while complying with the necessary safety
regulations. They believed that government measures
taken so far are insufficient, suggesting that many SMEs
urgently need bridging loans, with sufficiently long
repayment terms.
Fedustria also complained that while do-it-yourself shops
and garden centers had been allowed to reopen, home,
furniture and kitchen shops had been required to remain
closed. "There is no objective reason for this unequal
treatment that also leads to unfair competition", they said.
Soon after the letter was published, the Belgian
government announced that B2B companies and
construction sites would be allowed to reopen from 4th
May, followed by all stores, without distinction, from 11th
May.
France unwinds strict lockdown
Speaking to the STTC in April, French timber trade body
Le Commerce du Bois said the market impacts of the
pandemic have been mixed in France. Merchants were
impacted first as construction and manufacturing
customers shut down in March, importers followed soon
after. Subsequently, however, most merchants reopened,
although with much reduced personnel. Timber end user
industries and importers largely remained closed
throughout April.
France began unwinding its strict lockdown on 11th May,
allowing non-essential shops, factories and other
businesses to reopen for the first time in eight weeks. The
pace at which the lockdown is eased will vary across the
country which has been divided into red and green zones
depending on the level of infections in different regions.
The French health minister has warned full lockdown
measures could return if there is a surge in virus cases.
The Banque de France reported on 12th May the national
economy was operating 27% below normal levels in April.
According to Banque Governor Francois Villeroy de
Galhau, ¡°the ambition we have for the end of May is to
recover another 10 points.¡±
The Banque further stated that manufacturing activity was
down 37% last month, with the lockdown costing the
economy 6% in lost activity this year so far.
The government has rolled out a €110 billion ($118.9
billion) package of crisis measures to see companies
through the lockdown and heavily subsidise furloughs for
more than one out of two private sector workers to avoid a
wave of permanent layoffs.
Italian economy under severe pressure
Of all eurozone economies, Italy is likely to be the most
affected by the pandemic. According to Italian statistics
agency ISTAT, industrial output plummeted 28.4% in
March from the previous month, more than expected and
the steepest drop on record.
The restrictions to contain one of Europe¡¯s worst
outbreaks of the coronavirus were in place through most of
March and closed all factories except those considered
essential to the supply chain.
Total industrial output for the first quarter of 2020 in Italy
was down 8.4% compared with the previous three months,
ISTAT said, following a 1.1% drop in the fourth quarter of
last year. The euro zone¡¯s third-largest economy shrank
4.7% in the first quarter from the previous three months.
According to figures issued by the EC in early May,
Italy¡¯s public debt is expected to hit almost 160% of GDP
this year and the economy shrink by close to 10%,
highlighting the longer-term impact of coronavirus
lockdown measures in the country. The EC currently
predicts a 6.5% rebound in Italy¡¯s GDP in 2021.
In line with other European countries, Italy¡¯s government
began lifting tight lockdown restrictions from 4th May.
Since then, factories and building sites have been allowed
to reopen. More shops will be allowed to reopen from 18th
May.
The government is planning new measures to support
companies struggling due to the crisis, in a €55 billion
euro package dubbed ¡°Relaunch-Italy¡± due to be unveiled
later in May. This comes on top of a €25 billion package
already approved in March.
The new initiative will provide firms with grants, tax
breaks and greater access to loans, and is also expected to
offer direct handouts to families to pay for childcare and
holidays and funds for unemployment benefits.
The government has also stated that along with this
financial support, steps will be taken to simplify
administrative procedures and cut down bureaucracy.
Spain aims to complete shift out of lockdown by end of
June
The situation in Spain was described by trade association
AEIM as disastrous in their April report to STTC.
Members had postponed contracts and shipments, with
construction and other customer sectors in shutdown.
Some suppliers to parts of the joinery sector, however,
were still active.
According to the ATIBT Fair&Precious Covid-19 report
in April, wood was still coming into ports as normal,
although there were ¡®difficulties for companies
withdrawing goods¡¯.
The first estimate of Spanish GDP in the first quarter
showed that growth contracted by -5.2%, but the second
quarter is likely to be worse since the lockdown measures
were only introduced on 14th March.
The economic growth figure in the first quarter was the
worst since the series began in 1970. Consumption and
investment contracted by 7.5% and 5.8%, respectively.
Both export and import growth contracted by 8.4%.
Spain¡¯s construction sector contracted 8.1% during the
quarter.
The PMI for the manufacturing sector for April dropped to
30.8 compared to 45.7 in March. As the spread of Covid-
19 is coming under control, the lockdown is slowly being
phased out. Since 4th April, for example, non-essential
shops have been allowed to open by appointment and
restaurants can offer takeaway food.
Pedro S¨¢nchez, Spain¡¯s prime minister, announced that
shifting to a more normal situation would have four stages
and in the best case would be completed by the end of
June. It would, however, vary province by province. Some
of Spain¡¯s largest cities, including Madrid and Barcelona,
have not yet met the requirements for moving to Phase 1
and are still subject to the same restrictions as in April.
Eurozone construction activity falls to all-time low
The IHS Markit Eurozone Construction Purchasing
Managers¡¯ Index (PMI) fell to 15.1 in April, a new record
low which followed a substantial drop in March, when the
figure had fallen to 33.5. Survey data showed Italy and
France recorded extreme contractions in construction
output, while Germany registered a far slower decline but
one that was still marked overall.
Bernard Aw, principal economist at IHS Markit, said:
"Stricter measures to halt the spread of the Covid-19
pandemic placed restrictions on business operations,
dealing a substantial blow to eurozone construction firms
in April. Construction output across the euro area slumped
in April, following a severe drop in March, with Italy and
France especially hard hit amid reports of widespread
work suspensions among construction firms.
According to Bernard Aw, "demand was also severely
affected by the lockdown measures, with new orders
falling at the sharpest rate seen in over 20 years of data
collection. In response, firms made deep cuts to their
workforce numbers and purchasing activity.¡±
Supply chains remained under pressure despite the
substantially reduced purchasing demand. Delivery times
lengthened to the greatest extent in the series history and
at a rate that was severe overall.
Firms highlighted transport issues, customs restrictions
and supply shortages at distributors as key factors for
delivery delays. Each of the bloc's three biggest economies
reported much slower deliveries, with France recording
the most severe delays.
Eurozone building companies remained pessimistic about
future activity, with the Future Activity Index coming in
well below the neutral 50 level. Of the currency area's
three largest economies, Germany had the most negative
outlook over the next 12 months, followed by France.
EU organisations reaffirm their support for FLEGT and
EUTR
Feedback received by the EC on their ¡°fitness check¡± of
the FLEGT and EUTR regulations indicates a high degree
of consensus amongst European organisations and
interests on the broad aims and objectives of the policy
and legislative instruments.
It also indicates a desire to extend implementation and
improve enforcement of the regulations in various ways.
However, the relationship between the regulations and
private sector forest certification initiatives was a point of
difference between European organisations.
These are conclusions of a brief review of responses to a
public consultation undertaken by the European
Commission (EC) in February and March this year (the
review and analysis of responses were undertaken by MIS
and are not intended to reflect any official position or
opinion of the EU or its member states).
All the responses received on the public consultation are
available at:
https://ec.europa.eu/info/law/better-regulation/have-yoursay/initiatives/11630-Illegal-logging-evaluation-of-EU-rulesfitness-check-
Although relatively small in number and almost
exclusively from European interests, the 39 responses
received captured a wide range of regionally significant
forestry, industry and trade associations, alongside some
larger companies, and non-governmental organisations.
According to the EC, the ¡°fitness check¡± examines the
¡°effectiveness, efficiency, coherence, relevance and EU
added value of both regulations in contributing to the fight
against illegal logging globally¡±. The EC is evaluating
whether the instruments are fit for purpose or need to be
revised.
The ¡°fitness check¡± also addresses the coherence between
the regulations and, according to the EC will ¡°provide a
very valuable input for the assessment of potential
additional demand side measures.¡±
Most organisations responding to the fitness check agreed
that the FLEGT regulation and EUTR are ¡°fit for purpose¡±
in the sense of delivering positive gains against their stated
objectives of reducing trade in illegally harvested wood
and contributing to improved forest sector regulation.
From the trade side, the European Timber Trade
Federation (ETTF), representing timber trade associations
in 15 European countries, stated that they ¡°fully support
the FLEGT process and ask the EU to speed up the
process¡±. FederlegnoArredo, the Italian Federation of
Wood, Cork, Furniture and Furnishing Manufacturers, said
¡°we think that FLEGT and EUTR are key policies on
improving governance of developing and emerging market
countries¡±.
For the European woodworking industry, CEI Bois stated
that, for EUTR, the ¡°EU added value of this instrument is
undeniable¡± and ¡°the industry fully supports the FLEGT
system and recommends the EU to speed up the process
with producing countries in order to increase the volumes
of FLEGT-licensed wood available for the European
market¡±.
Similarly, the European Furniture Industries
Confederation (EFIC) noted that it ¡°sees the benefits of a
wider application of the EUTR¡±. The Finnish Forest
Industry Federation (FFIF) called the EUTR ¡°an important
tool to prevent illegally harvested timber products to be
placed on the EU market¡± and called for the scope to be
extended. The European Panel Federation (EPF), on behalf
of European manufacturers of wood-based panels, said
that it ¡°embraces EUTR¡±.
The European Landowners Organisation, which represents
the hundreds of thousands of landowners, managers and
farmers across Europe, stated simply that they ¡°consider
that the EUTR is ¡®fit for purpose¡¯ and continues to be the
main tool to minimize the risks of unfair competition in
market¡±. Furthermore that ¡°the principle of due diligence
must remain central and the implementation of the EUTR
should be improved, particularly in areas deemed riskier¡±.
Environmental groups also remained broadly supportive of
the FLEGT process. FERN said that it believes the VPAs
have ¡°prompted forest-related legal and policy reforms in
all partner countries. This has improved governance,
increased sustainable forest management, and reduced
deforestation¡±.
The Environmental Investigation Agency (EIA) said that
the EUTR and FLEGT Regulation ¡°provide a framework
that is fit for purpose and contributes to the international
fight against illegal logging and its related trade.¡±
ClientEarth ¡°considers that both the EUTR & FLEGT
Regulation have contributed to more legality and
transparency in the global timber supply chain and have
made progress towards achieving the objectives of the
FLEGT Action Plan¡±.
Earthsight noted that the EUTR is ¡°a pioneering piece of
legislation and remains a vital tool in the global fight
against illegal deforestation and the associated trade in
commodities¡±.
Call for FLEGT measures to be extended and
deepened
While there was broad support for the FLEGT process and
the EUTR, there was also a call for the FLEGT measures
to be extended and deepened in various ways.
CEI Bois called the EUTR to be extended to ¡°include all
wood products, printed products and furniture products
currently outside the scope, except for recycled materials
and wood packaging for transport¡± and suggested this
would ¡°increase the coverage of imports of ¡®high-risk¡¯
wood by almost 30%¡±.
Other organisations called for more specific changes in
EUTR product scope, for example EOS, the European
Sawmillers Organisation wants the law to be extended to
include HS4402 (charcoal), HS4404 (hoopwood, poles
etc), and HS4419 (Tableware and kitchenware); EFIC
asked that HS9401 (wooden seating) and 4421 (other
wood products such as coffins); and the FFIF specified
printed papers (HS49) as well as wooden seating.
Several commentators highlighted the need to extend
FLEGT licensing to more countries as quickly as possible.
ETTF said that the ¡°FLEGT process started in 2003. Up to
now there is only one country that has a FLEGT system in
place, namely Indonesia ¨C this is clearly not enough.¡±
CEI-Bois ¡°recommends the EU to speed up the process
with producing countries in order to increase the volumes
of FLEGT-licensed wood available for the European
market¡±.
Similarly, FederlegnoArredo observed ¡°quantities of
timber or timber products imported into the EU under the
[FLEGT licensing] scheme are still too low. Speeding up
the implementation of VPA¡¯s on the Congo Basin and
parts of West Africa will boost the number of FLEGT
licences¡±.
The Italian association also mentioned ¡°Insufficient
promotion on benefits of FLEGT licensing and FLEGT
VPA initiative amongst EU¡¯s member states and
stakeholders both in the EU and from countries of
harvest.¡±
Some commentators called for further efforts to ensure
effective enforcement of EUTR. CEI-Bois noted the need
to ¡°ensure a consistent implementation and enforcement
by EU Member States. Different levels of stringency of
the controls performed by Competent Authorities lead to
an uneven playing field and ultimately undermine the goal
of the Regulation¡±.
EFIC said that ¡°the experience shared by EFIC members
demonstrates a lack of correct implementation of the
existing EUTR rules¡± and called on the EC to ¡°coordinate
a more consistent enforcement of the EUTR¡.in
particular, there is an urgent need to close existing gaps
and harmonise rules¡±.
EOS called on the EC to give ¡°clear indication on
respective legality risks in different countries and on the
appropriate and expected risk mitigation measures for
ALL market participants encountering these risks¡±.
IKEA said that ¡°we see implementation issues severely
slowing its potential to contribute to responsible wood
sourcing. Current processes put up obstacles for both large
and small operators¡± and suggested that ¡°Member States
define ¡®acceptable due diligence systems¡¯ in different
ways¡±.
According to IKEA, ¡°this makes it difficult for operators
to efficiently meet the requirements without changing the
process for each Member State. This, combined with
inconsistent enforcement and auditing procedures (at times
procedures varying from case to case within the same
Member State), is inefficient and expensive for everyone
involved.¡±
Fedustria, the Belgian timber industry association, said
that ¡°there is no clear guidance on what is exactly
expected from the operators. It is essential that the
necessary guidelines and recommendations are provided,
which give the companies the opportunity to improve their
due diligence system. We have repeatedly indicated that
the objective of the EUTR should not be to punish, but to
work towards a better system with all stakeholders in a
constructive manner.¡±
Fedustria raised concerns about the methodology for
targeting specific operators in EUTR; ¡°We have observed
that the same (major) players are continually subject to
inspections, while many small-scale operators slip through
the net. However, it is precisely the major players who
have developed and continuously refine good due
diligence systems¡±.
Fedustria also identified a possible loophole in the EUTR:
¡°companies being registered in a European country,
custom clear goods in another European country than their
registered country. As a consequence, they are not being
controlled by the Government of the importing country,
since they are not registered with any legal set-up (imports
are done through fiscal representation) and furthermore
they are also not controlled by their governments in their
home countries, since there are no registries of any
imports¡±.
Some NGOs were also critical. Earthsight observed that
¡°while there have been laudable steps taken by a few
Member States to enforce this law over the years, these
instances have remained the exception rather than the rule.
It has now been seven years since the EUTR entered into
force and the enforcement response to illegal logging
cases, even cases where plentiful evidence of illegality
related to specific companies or supply chains has been
made public, has been poor¡±.
Global Witness said that they "undertook several
investigations on trade of illegal timber in the past years
which showed how illegally harvested tropical timber is
still being placed on the EU market. These revealed
weaknesses in the enforcement of EUTR by certain
member states which are undermining the effectiveness of
the law¡±.
The NGO France Nature Environnement requested that
¡°the quality assessment of the EUTR and FLEGT explore
and identify the factors hindering the application of the
EUTR.
Indeed, this assessment must assess the legal and
operational elements preventing its effective
implementation¡± and suggested that ¡°in France, only 30
agents from the regional forestry and timber services have
been trained to control nearly 5,000 loggers and sawyers.
With such a limited resource, the EUTR cannot apply
properly¡±.
Disputed role of certification in EUTR
A point of difference amongst organisations providing
feedback to the EU is the role of private sector
certification systems like FSC and PEFC in EUTR. Some
private sector interests suggested there should be greater
recognition for the risk mitigation role of certification in
the regulation.
The EPF said that EUTR should ¡°recognise 3rd party
verification and certification bodies (e.g. SFI, ATFS, FSC,
PEFC or ISO 38200) as enough risk minimisation
especially for complex supply chains such as panels and
paper since operators do not always have access through
the supply chain to all the necessary information on the
origin of the processed wood in their purchased product.¡±
The FFIF didn¡¯t go so far to ask for a green lane through
EUTR for certified products but called for ¡°greater
coherence with forest certification initiatives¡± and that the
¡°role of forest certification, as tools to verify the legal
origin of raw-materials, should be better acknowledged
when evaluating needs of possible revision of the EU
legislative framework"
Similarly IKEA said that the EU should ¡°create a common
approach to third-party certification: agree upon and
recognize internationally-accepted forest certification
systems, like FSC, as one important part of the many parts
necessary to build a solid due diligence system¡±.
However, this proposal for a greater role for certification
was flatly rejected by some. For example, the NGO
Earthsight said that: ¡°Our organisation has researched and
documented several instances where timber products at
very high risk of being procured or traded illegally have
entered EU states, and have made them publicly available
via our Timberleaks platform or in-depth reports. We have
also sent these directly to EUTR competent authorities.¡±
¡°One of the common threads running through our
investigations is that almost all the companies we have
named in them as being connected to illegal deforestation,
bribery or corruption, are certified, mainly buy certified
wood, and source timber from certified forests¡±.
Earthsight went on to suggest that ¡°Timber industry bodies
have acknowledged that certification is no guarantee of
legality and that companies must do more to ensure
products they are importing are not illegally sourced.
Although certification can lead to better forest governance
and protection in some cases, reports have shown this
impact is reduced in countries with high levels of
corruption and poor levels of governance.
The FSC has acknowledged that voluntary standards were
not designed to deal with corruption and that certification
is no substitute for the role of the state¡±.
A call for a more measured role for certification in EUTR
also came from the Polish State Forests National Forest
Holding (PSFNFH), particularly significant because this
organisation oversees about 7.5 million hectares of forest
in Poland, of which nearly 7 million hectares are FSC
certified.
PSFNFH noted that ¡°having in mind that in accordance
with EUTR ¡®... certification or other third party verified
schemes that include verification of compliance with
applicable legislation may be used in the risk assessment
procedure¡¯, it must be emphasized that forest certification
is mostly [a] marketing tool. It means that, operators
placing timber or wood products on a market, should rely
on their own risk assessment and mitigation of the risk
identified. Operators fulfilling requirements of this
Regulation must be fully responsible for their DDS".
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