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Report from
Europe
EU Council and Parliament strike provisional deal on deforestation-free
products regulation
On 6 December, the European Council and the European
Parliament agreed on the text of a regulation to minimise
the risk of deforestation and forest degradation associated
with products that are imported into or exported from the
European Union.
The agreement is provisional pending formal adoption in
both institutions.
The agreed text of the regulation has yet to be published
and the following description draws on:
The EU regulation on deforestation-free products is a part
of the European Green Deal and builds on the 2019
European Commission communication on stepping up EU
action to protect and restore the world’s forests. In this
communication, the Commission announced four action
items on deforestation:
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Reducing the footprint of EU consumption;
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Stepping up international cooperation;
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Improving sustainable financing; and
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Boosting research and innovation.
The new regulation builds on the first action item by
recognising that the EU is complicit in global
deforestation through domestic consumption. It
complements the 2030 Forest Strategy, with which the EU
aims to strengthen reforestation and conservation efforts
inside the region and replaces the EU Forest Law
Enforcement Governance and Trade regulation (FLEGT),
which includes the EU Timber Regulation (EUTR).
The provisional agreement sets mandatory due diligence
rules for all operators and traders who place, make
available or export the following commodities from the
EU market: palm oil, beef, timber, coffee, cocoa, rubber,
and soy. The rules also apply to a number of derived
products which in the wood sector include furniture,
charcoal, and printed papers.
The last two items were not formerly regulated under
EUTR. A review will be carried out in two years to see if
other products need to be covered.
The co-legislators set the cut-off date of the new rules at
31 December 2020, meaning that only products that have
been produced on land that has not been subject to
deforestation or forest degradation after 31 December
2020 will be allowed on the Union market or to be
exported.
The Council and Parliament agreed to define
“deforestation” in accordance with the definition
established by the FAO for forest monitoring purposes in
their Global Forest Resource Assessment (FRA): “the
conversion of forest to other land use independently of
whether human-induced or not”.
This definition implies that deforestation refers to a
change in land use, not in tree cover.
It is also dependent on a definition of forest, which, in the
FRA, combines physical criteria (minimum thresholds of
10% canopy cover, 0.5 hectare area and 5m in height) and
a notion of the predominant land use, excluding treecovered
areas where the predominant use is agriculture or
urban.
In accepting the FAO definition of deforestation, the
legislation will impose no prohibition on products from
conversion of “other wooded land” with sparser tree cover
(like scrublands and savannas) as the European Parliament
had proposed in amendments in July.
The co-legislators define “forest degradation” as
“structural changes to forest cover, taking the form of the
conversion of naturally regenerating forests and primary
forests into plantation forests and other wooded land and
the conversion of primary forests into planted forests”.
The EU Council press release refers to this as an
“innovative” definition reflecting the fact that, according
to the FAO 2022 State of the World’s Forests report, a
“widely applied definition of forest degradation is
unavailable, and data are scarce”.
The legislation prohibits placing on the EU market of any
regulated commodity derived from deforested land or
forest degradation in accordance with these definitions
irrespective of whether the deforestation or degradation is
legal or illegal in the country of harvest.
The co-legislators agreed on stringent due diligence
obligations for operators, which will be required to trace
the products they are selling back to the “plot of land”,
identified by geolocation coordinates, where it was
produced. At the same time, the new rules are designed to
avoid duplication of obligations and reduce administrative
burden for operators and authorities. It also adds the
possibility for small operators to rely on larger operators to
prepare due diligence declarations.
The Council and Parliament agreed to set up a
benchmarking system, which assigns to third and EU
countries a level of risk related to deforestation and forest
degradation (low, standard, or high). The risk category
will determine the level of specific obligations for
operators and member states’ authorities to carry out
inspections and controls. This would facilitate an
enhanced monitoring for high-risk countries and
“simplified due diligence” for low-risk countries.
The Council and Parliament also tasked the competent
authorities to carry out checks on 9% of operators and
traders trading products from high, 3% for standard-risk
countries and 1% from low-risk countries, in order to
verify that they effectively fulfil the obligations laid down
in the regulation.
In addition, competent authorities will carry out checks on
9% of the quantity of each of the relevant commodities
and products placed, made available on, or exported from
their market by high-risk countries.
The legal text agreed between the European Council and
Parliament also takes into account human rights aspects
linked to deforestation, including the right to free, prior
and informed consent by indigenous peoples.
The agreement maintains the provisions regarding
effective, proportionate and dissuasive penalties and
enhanced cooperation with partner countries, as proposed
by the Commission. It provides that fines proportionate to
the environmental damage and the value of the relevant
commodities or products concerned should be set at the
level of at least 4% of the operators' annual turnover in the
EU and includes a temporary exclusion from public
procurement processes and from access to public funding.
Indonesia and Brazil raise “serious concerns” about EU legal proposal
On 28 November, a joint letter from Indonesia and Brazil
addressed to the Presidents of EU Council, Commission
and Presidency was circulated to the WTO Committee on
Agriculture. This raises “serious concerns” regarding the
EU deforestation-free legislative proposal. The joint letter
states:
“While we agree that the fight against climate change and
the conservation and sustainable management of forests
are urgent tasks, we regret that the EU has chosen the
option towards unilateral legislation instead of an
international engagement to deal with these shared
objectives, reflected in the Paris Agreement and the SDGs,
to which we have all subscribed”.
In the letter, Indonesia and Brazil jointly encourage the
EU “to entertain further consultation with third countries,
particularly developing producing countries before the
final approval of the proposed legislation”. They also
claim that “Some of the concerns expressed by developing
countries in formal public consultations about the
proposed legislation have, regrettably, been given scarce
consideration”.
Indonesia and Brazil raise specific concerns about the
country assessment criteria and benchmarking system
which they allege “are inherently discriminatory and
punitive in nature”. They suggest that “Its most likely
effect will be to generate trade distortion and diplomatic
tensions, without benefits to the environment” and that “it
imposes additional controls, entails reputational risks for
companies and is likely to penalize producers in
developing countries, especially smallholder farmers and
SMEs”.
The letter is available at:
https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/G/AG/GEN213.pdf&Open=True
EU ‘moving the goal posts’ with new timber requirement, Indonesia
says
An article published by Mongabay, the independent
environmental news service, on 10 November quotes
Indonesian government sources concerned about the
implications of the EU’s new deforestation-free regulation
for the timber licensing arrangements made under the
existing FLEGT regulations.
Under the FLEGT, timber certified by SVLK, Indonesia’s
national forest certification system, is recognised as fully
compliant with the requirements for legal timber under the
terms of the EUTR and therefore not subject to any further
due diligence by EU operators.
This “green lane” advantage in EUTR is one component of
the EU’s commitment under Article 13 of the Voluntary
Partnership Agreement signed by the EU with Indonesia in
2014 that the EU “promote a favourable position in the
Union market” for FLEGT licensed timber from
Indonesia.
Arif Havas Oegroseno, the Indonesian ambassador to
Germany, is quoted by Mongabay as saying that the
process of getting Indonesian timber exporters to comply
with the SVLK requirements had been arduous, and that
critics of the system might now feel justified in their
opposition to it. “There are some people who disagreed
with that, [they] will say ‘Look at that, the government is
being duped by the EU, so now they have a new standard.
So why do we have to go with the SVLK if there are new
due diligence standards?’”
According to Mongabay, Arif called the EU’s change of
policy “a classic case of shifting the goal posts” and “a
violation of the [FLEGT VPA] commitment”. Arif is
quoted as suggesting that the EU “say that they accept and
recognize the FLEGT VPA, but at the same time they’re
introducing a new standard.” Arif suggested that if the EU
is now saying that FLEGT Licensed Timber from
Indonesia is legal but not sustainable, then the EU should
“sit with us again to renegotiate the treaty.”
Mongabay also quotes Arif as suggesting that the “failure
by the EU to sufficiently engage with Indonesia could
erode the latter’s trust”.
The Mongabay article also quotes Adrianus Eryan, head of
forestry and land at the Indonesian Center for
Environmental Law (ICEL), a Jakarta-based think tank, as
saying that the deforestation regulation throws up a “new
trade barrier.” “It has the potential to hamper the
implementation of the VPA,” Adrianus told Mongabay.
“The FLEGT VPA is like a toll road for Indonesian timber
products to enter the EU market. If the EU deforestation
bill is enforced, there will be a new checkpoint on the toll
road. So the process will be longer.”
Adrianus spoke to Mongabay about the possibility of a
WTO complaint by Indonesia on the new deforestation
regulation, suggesting that this “would be a last resort,
given that the timber legality agreement calls for Indonesia
and the EU to first address any dispute bilaterally”.
Adrianus suggested to Mongabay that the matter should be
brought before the Joint Implementation Committee that
oversees the VPA. “If after two months that too fails, then
the parties may seek mediation by a third party, including
the WTO”, Adrianus said.
In a follow up article on 14 November, Mongabay
suggested a possible roadmap towards closing the gap
between Indonesia’s market expectations for FLEGT
Licensed timber and the EU’s new requirements for
deforestation-free products.
Mongabay note that in 2021 the Indonesian government
had already initiated a process to rebrand SVLK as a
mechanism to deliver sustainable timber rather than as a
legality verification system. Last year, Indonesia’s
Minister of Environment and Forestry issued a regulation
that changed the name of the system from Indonesia’s
Timber Legality Verification System to Indonesia’s
Sustainability and Legality Verification System, still using
the SVLK acronym.
Mongabay quotes Agus Justianto, the forest ministry’s
Director-General of Sustainable Forest Management, as
saying that since issuance of the new regulation, the
ministry has prepared new guidelines to ensure SVLK
delivers both legality and sustainability aspects.
According to Agus, as quoted by Mongabay, “The
rebranding of SVLK reiterates the commitment of
Indonesia towards effort to achieve sustainable forest
government and to supply the market base with legally
harvested and sustainable timber and forest product.”
Mongabay also quotes Sigit Pramono, the head of the
Indonesian ministry’s forest products export-import
directorate, who said that the new SVLK is established not
only to develop the country’s timber industry but also to
strengthen sustainability components to better align with
the EU’s deforestation-free regulation. “We won’t give
SVLK certificates if they [timber producers] conduct
deforestation,” he told Mongabay.
Sigit told Mongabay that the EU requirement for timber
producers to include the geographic coordinates of their
plots of land will be included in the guideline of the new
SVLK. And in the new SVLK, the sustainability aspect of
a producer’s operation will be verified, he added.
In the old SVLK, which had a requirement for producers
to source their timbers sustainably, there was no
verification process. Timber producers only had to submit
their sustainability operational plans to the government,
Sigit told Mongabay.
With the new SVLK, there’s a verification process to
make sure the sustainability plans are truly carried out,
said Sigit according to Mongabay.
By strengthening the SVLK’s sustainability aspects, the
Indonesian government is hoping that Indonesian timber
will not have to go through a long due diligence process
before being placed on the EU market, he said.
Mongabay speculates that the new SVLK could result in
Indonesia being categorized as a low-risk country in terms
of deforestation under the benchmarking system to be set
up by the EU. This would mean EU operators could apply
“simplified due diligence” placing Indonesian timber on
the EU market and Indonesian timber would be subject to
less checks by EU competent authorities.
The Mongabay articles are available at:
https://news.mongabay.com/2022/11/eu-moving-the-goalposts-with-new-timber-requirement-indonesia-says/
https://news.mongabay.com/2022/11/with-new-eu-rulesahead-indonesia-adds-sustainability-to-its-timber-legalitysystem/
Launch of “Broader Market Recognition” framework
for sustainable tropical timber systems
A new process has been launched to better incentivise
good forest governance and sustainable forest
management in tropical countries through broader market
recognition (BMR) of national sustainable timber
assurance systems.
The launch took place at the Indonesian Pavilion at the
COP27 of the UNFCCC held in Sharm El-Sheikh during
November with the issue of A Joint Statement to be signed
by a coalition of government, private sector, and civil
society representatives from tropical timber producer
countries “seeking broader market recognition of national
verification systems”.
The process to initiate the BMR framework, which has
been supported by the UK government, builds on launch
of the “Global Forests need Global Governance, A
Tropical Timber Accord” signed by forest products trade
and industry associations at COP26 in Glasgow in
November 2021.
The Accord identified a need for political leaders to create
a new international initiative (or revitalise an existing
initiative) which defines and recognises “a system of
defined rules-based ‘legality’ and ‘sustainability’ [for
tropical timber products] which supports governance and
strong global collaboration”.
The process builds on the far-reaching efforts made by
tropical countries to develop and implement multistakeholder
forestry assurance systems in recent years in
response to the EU FLEGT process and wider
international measures focused on improved forest
governance. The process also responds to evidence that
international market recognition of the sustainability
credentials of robust multi-stakeholder national systems
such as Indonesia’s SVLK and Ghana’s Legality
Assurance System and Wood Tracking System
(LAS/WTS) is extremely limited.
Contributions to the launch event were made (in person
and by web link) by several high-level policy makers
including: Mr. Alue Dohong, Vice Minister of
Environment and Forestry Indonesia; Madam Rosalie
Matondo, Minister of Forest and Economy, Republic of
Congo; Mr. Harrison Karnwea, Chairperson Forest
Development Authority, Liberia; Mr. Chris Beeko,
Director of the Ghana Forestry Commission; and a
representative on behalf of Mr. Lee White, Minister of
Water, Forests, Sea, Environment and Climate Change,
Republic of Gabon.
The session live streamed online and can still be viewed
on the Indonesia Pavilion YouTube web channel
(https://youtu.be/eLG5yWu6SnE?t=6621).
The BMR Joint Statement emphasises that “robust
national timber verification systems have demonstrated an
ability to effectively counter deforestation and maintain
forest cover, and therefore need adequate support from
producer and consumer countries to stimulate further
uptake”. Signatories to the Statement “commit to the
development of an international framework to drive
transformational change in the forest sector by rewarding
good governance with strong market incentives”.
The Statement sets out several key principles on which
robust national systems should be based, including that
they deliver forest management standards that:
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are developed through inclusive multistakeholder
processes
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ensure compliance with national legal
frameworks that include laws that address
environmental, social, and economic principles
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require mandatory nationwide compliance with
the agreed standard
-
provide opportunity for independent forest
monitoring
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are audited by an independent third party
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ensure continuous improvement of the standard
and system over time
The Statement calls for the establishment of an “oversight
structure” that can assess the extent to which national
systems that it seeks to promote are characterised as
having the elements described above, and which
safeguards and strengthens the nationally determined
standards. It will recognise the need for and help channel
investment in capacity building of small and medium
enterprises.
On the market side, it will aim to “provide graduated
incentives to reflect progress towards a robust national
system”, and “advocate a green lane access in international
markets for products produced under such systems”. It will
also “invest in promotion of products produced under such
systems”.
Signatories to the Statement commit to “continuing close
collaboration within this group and working with other
like-minded tropical timber producer countries to identify
an international mechanism that builds on the strengths of
the FLEGT process while addressing its weaknesses”. An
overarching objective is to “empower collective leadership
of producer countries that leads to a greater knowledge
sharing, higher level of commitment towards good forest
governance, and mutual accountability”.
Tropical timber producer countries are encouraged to join
the initiative and thereby “engage in extensive
cooperation, to speed up transformational change in the
forest sector by incentivising good forest governance with
strong market incentives”.
The text of the full Statement is availableat:
https://timberdevelopment.uk/broader-market-recognitionjoint-statement/
Countries that have so far indicated their intent to
participate are Indonesia, Ghana, Liberia, Guyana,
Cameroon, and Congo. Each country is expected to
nominate three signatories, representing respectively
government, private sector, and civil society in that
country. On the consumer side, support for the initiative
has been expressed by the Chinese association CTWPDA
and by Timber Development UK. More information on the
initiative will follow on from a planned meeting in Bali
early next year when a road map will be agreed among the
participating countries.
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