Aimin Wang Sustainable Forestry Program Officer Global Environmental Institute April 26 nd 2007 "Regulating Chinese Forest-related Enterprises" Encouraging the Chinese Government to Take an Active Role in Sustainable Forest Resource Use Abroad

2 Content Project background Project background Progress and activities Progress and activities Conclusions and suggestions Conclusions and suggestions

3 Chinese Resource Strategies Oversea Shortage of natural resources: petroleum, minerals, food, and wood Shortage of natural resources: petroleum, minerals, food, and wood How should these overseas resources be used? How should these overseas resources be used?  Sustain a peaceful and harmonious world  Import and encourage China’s “Going Out” Policy China should take responsibility for the practices of China’s businesses China should take responsibility for the practices of China’s businesses Increased economic boycotts ： anti -dumping, trade barriers and trade protectionism Increased economic boycotts ： anti -dumping, trade barriers and trade protectionism Background

4 Chinese Timber Supply and Demand China is becoming one of the main wood consuming and processing countries China is becoming one of the main wood consuming and processing countries China’s wood resources: China’s wood resources:  For its population, China has only 20% of the world’s average per person forest area  Wood consumption per person in China is only 35% of the world average. National forest protection policy ： Six national forest programs since 1998 National forest protection policy ： Six national forest programs since 1998 Over 50% of wood demand in China is met by importing wood from overseas Over 50% of wood demand in China is met by importing wood from overseas

5 Chinese Forest Issues Overseas Enterprises’ “Going Out” ： Illegal logging and illegal importing (Southeast and Northeast Asia) Enterprises’ “Going Out” ： Illegal logging and illegal importing (Southeast and Northeast Asia) Negative impact on China’s international image and the reputations of China’s enterprises Negative impact on China’s international image and the reputations of China’s enterprises The issue remains at the NGO and bilateral stage. China needs to take a more active role The issue remains at the NGO and bilateral stage. China needs to take a more active role Options ： Options ： Passive sanctions vs. self-discipline by enterprises Passive sanctions vs. self-discipline by enterprises Short term actions vs. long term management Short term actions vs. long term management

6 Resource Use and CSR Sustainable resource use must be encouraged through Compensation Concession Agreements: Public products, altruism, CSR Sustainable resource use must be encouraged through Compensation Concession Agreements: Public products, altruism, CSR Corporate social and environmental responsibility must be encouraged. It doesn’t happen on its own. Corporate social and environmental responsibility must be encouraged. It doesn’t happen on its own. Options: government supervision and social pressure Options: government supervision and social pressure International experience: regulation, incentives, CSR International experience: regulation, incentives, CSR

7 Project Objectives Analyze Chinese forest enterprises’ exploitation of overseas resources, research international experience and strategies for these issues Analyze Chinese forest enterprises’ exploitation of overseas resources, research international experience and strategies for these issues Investigate strategies for sustainable development of forest resources and encouraging sustainable enterprises Investigate strategies for sustainable development of forest resources and encouraging sustainable enterprises Analyze government policy, especially management and enterprise standards of China’s “Going Out” policy Analyze government policy, especially management and enterprise standards of China’s “Going Out” policy Explore models based on cooperation between government and enterprises Explore models based on cooperation between government and enterprises

8 Activities Background research Background research Study tour ： Cambodia, Myanmar, Thailand Study tour ： Cambodia, Myanmar, Thailand Draft report and policy suggestions: Diplomacy, legislation, guideline, financing and regional forums Draft report and policy suggestions: Diplomacy, legislation, guideline, financing and regional forums Workshops: research, consultation and training Workshops: research, consultation and training

9 Conclusions Research has focused on Cambodia, Myanmar, Thailand Research has focused on Cambodia, Myanmar, Thailand Illegal logging was rampant. It threatened forest health and timber resources. Illegal logging was rampant. It threatened forest health and timber resources. Chinese enterprises have limited knowledge of local legislation and conventions, especially those relating to land use. Chinese enterprises have limited knowledge of local legislation and conventions, especially those relating to land use. These countries are taking new interest on environment and biodiversity issues These countries are taking new interest on environment and biodiversity issues Enterprises want a formal competition environment Enterprises want a formal competition environment Opportunities exist for bilateral cooperation Opportunities exist for bilateral cooperation

10 Research Conclusions Strengthening supervision and regulation of Chinese enterprises:  Complete the “Guidelines for Sustainable Forests” and the “Management and Trade Guidelines”. The “Silvilculture Guidelines” is complete.  Research and write Enterprise CSR Report  Conduct trainings, require certifications, and establish a system of regulating who can enter these markets  Government should encourage sustainable practices and reward compliant companies through incentives such as financial support

11 Conservation Concession Agreement The focus of the project: 1.The conflict between biodiversity conservation and community livelihoods 2. The conflict between biodiversity conservation and development initiatives of enterprises About CSR

12 Model Framework 1.Two agreements: A) Between GEI and Nature Reserves B) Between GEI and Farmers 2.A general finance model Government matching fund GEIHydropower station compensation Conservation Conservation & Development Fund Rural development GEI Socially responsible enterprises Profit

13 Thank you ！