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The UK is pledged to incorporate the EU Timber Regulation and EU FLEGT and FLEGT licensing rules in its statutes post-Brexit, according to Therese Coffey, parliamentary under-secretary of state at the Department for Environment, Food and Rural Affairs (DEFRA).
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The European Commission has launched a public consultation on the contentious issue of whether the EU Timber Regulation (EUTR) should broaden in scope to encompass more timber and wood product imports to the EU.
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EUTR authorities in Nordic and Baltic countries are involved in a collaborative project to assess and monitor Chinese timber and wood product imports. The first phase of the project, which ran until July 2017, aimed at improving understanding of Chinese supply chains, experience sharing between EU and EEA countries and cross checking Chinese export documents through sharing customs data.
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The question whether FLEGT-licensed timber should be considered “a step backwards” compared to timber certified by voluntary third-party schemes was frequently raised as a part of IMM 2017 interviews. It’s a difficult question to answer at the global level, as the Voluntary Partnership Agreement (VPA) process determines legality rather than sustainability per se. There is, however, a measure of common ground between the various VPAs currently being implemented or under negotiation and some unique achievements under the VPA process that show that FLEGT-licensed timber is “more than just legal”.
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Vietnamese VPA expected to create positive regional dynamics
IMM spoke with Edwin Shanks, VPA Joint Implementation Coordinator for Vietnam, about latest developments in the country. Vietnam is regarded as a processing hub in the timber sector in Southeast Asia and is an important supplier, in particular of indoor and outdoor furniture, for the EU market. In 2015, Vietnam exported timber and timber products to 106 countries worldwide with a total export value of around $6.8. The country imports roughly 40% of its wood requirements,
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“We are often sceptical of things we don’t fully understand; tangible, factual information is key for demand-side trade audiences", says UK TTF Head of Sustainability, Mike Worrell. IMM interviewed Mike following his visit to Indonesia in October 2017 to gather first-hand experience of how the Indonesian FLEGT-licensing system works.
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“EC should do more to promote FLEGT-licensed timber”
In November 2016, Indonesia started issuing FLEGT licenses which are recognised proof of legality in the EU market and thereby became the first country to fully implement a Voluntary Partnership Agreement (VPA) with the EU. Dr Rufi’ie, Director of Forest Products Processing and Marketing with the Indonesian Ministry of Environment and Forestry, is responsible for daily implementation of the Indonesian Timber Legality Assurance System (Sistem Verifikasi Legalitas Kayu/SVLK) which the VPA is based on. In an interview with IMM, Dr Rufi’ie talks about Indonesia’s motivation for entering into a VPA, challenges met on the way and first experiences with FLEGT-licensed timber.
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EU gets back to building
European construction is a key market for many European timber businesses so, as it was among the sectors hit hardest and longest by the international economic downturn, they suffered accordingly. Some companies reported seeing their sales to builders drop by 80% during the downturn which began a decade ago. In Spain, where the building industry suffered in the recession more than most, it shed 1.5 million out of 2.5 million workers. Elsewhere there was also dramatic slowdown and loss of capacity. But today, according to the European Construction Industry Federation (FIEC), the sector is slowly but surely getting back to growth.
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Eurozone builds economic resilience…but Brexit causes UK caution
The EU timber sector is being buoyed by broadly resurgent economic conditions, with the UK the only major standout from an increasingly positive trading consensus due to growing concerns about the effect on business and consumer sentiment of Brexit negotiations.
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The European Commission has developed an IT system named FLEGIT/TRACES to support the implementation of FLEGT Licensing Scheme in the EU. FLEGIT allows importers to electronically submit a FLEGT Licence to a Competent Authority and enables the electronic and fast validation of the FLEGT Licence by the Competent Authorities and subsequent clearance by the Customs.
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Alongside regular surveys of market opinion to assess the market impact of FLEGT licensing, IMM is implementing near-real time monitoring of trade flow statistics. Early results of this monitoring indicate that there has been little immediate effect of the licensing system to either boost or impair timber trade between Indonesia and the EU. In fact, the value and volume of Indonesian trade with the EU has changed very little since the first licenses were issued in November 2016, while Indonesia’s share of the EU market has also remained stable.
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The first round of IMM surveys in Indonesia, the only VPA partner country currently issuing FLEGT licenses, covered 47 timber industry players exporting a wide range of products – including furniture and furniture parts, decking, mouldings and plywood as well as paper, fibre- and particleboard, doors, gluelam and sawn timber – to the European Union and world-wide. Companies were surveyed about their main European export markets and the overall relevance of Europe as a sales market as well as their perception of the VPA process, FLEGT licensing and the EUTR.