1. 1 New EU legislation to prevent trading in illegal timber on the EU market SARAWAK INDUSTRY UPDATE Kuching, 20 July 2009 Vincent van den Berk European Commission Delegation to Malaysia (Forest Law Enforcement Governance and Trade, FLEGT)

2. 2 context new EU legislation context new EU legislation   FLEGT Action Plan (adopted in 2003)   Aimed at addressing illegal logging and related trade   Combining supply and demand measures; creating market incentives for trade in guaranteed legal timber; using and expanding existing mechanisms and adding new ones.

3. 33 EU FLEGT Action Plan EU FLEGT Action Plan Frames EC tropical forest work – coordinates supply and demand side measures for timber: – –Voluntary Partnership Agreements supported by – –EU legislation to exclude illegal timber from the EU market ------------------------------------------------------------------------ – –Development cooperation – –Generating demand through public procurement policies – –Promoting certification and labelling – –Support private sector initiatives – –CITES/UNFF/ITTO

4. 44 VPA ’ s agreements   Increase trade in guaranteed legal timber between FLEGT countries and the EU   Set up control and licensing systems to provide a Government-backed guarantee of legality   Provide financial, technical and institutional support to improve forest governance   Generate demand on the EU market/create market incentives (Due Diligence Regulation & public procurement & promotion)

5. 55 The VPA components 1. 1.Definition of legality – the standard (stakeholder engagement) 2. 2.Verification – checks that FMU operations meet the standard 3. 3.Chain of custody – tracking products from FMU to export 4. 4.Licensing – official evidence that each export shipment is legal 5. 5.Independent monitoring – to maintain system credibility 6. 6.Market monitoring – effects of FLEGT on the EU market 7. 7.Management structure Different partner countries => different approaches: TLAS can be met in many ways as long as assurance of legality is given – –building on systems existing in partner countries, providing acceptable uniformity between systems, enabling consistent evaluation of different systems – –based on Principles & Criteria

6. 6 Pressure for additional measures & EU market incentives Pressure for additional measures & EU market incentives considerations during policy formulation: To prohibit the sale of illegally harvested timber.To prohibit the sale of illegally harvested timber. Obligatory legality certification by traders.Obligatory legality certification by traders. “Due diligence” by traders selling timber in EU.“Due diligence” by traders selling timber in EU.  Preferred option: Due diligence for being the most effective while the least cost-intensive

7. 77 Due Diligence system (DDR) Due Diligence system (DDR)  Obligation on operators: Use a due diligence system which will sufficiently guarantee legality;  Elements of the due diligence system: Product information: description, country of harvest, volume or weight, supplier & legal complianceProduct information: description, country of harvest, volume or weight, supplier & legal compliance Risk management: high risk = stricter controlsRisk management: high risk = stricter controls Auditing of the effectiveness of the systemAuditing of the effectiveness of the system  Operators can either set up their own systems or make use of the system of a monitoring organisation

8. 8 What is considered legal in DDR? DDR likely requires traders to minimize the risk that they trade in illegal timber; If challenged traders should provide information demonstrating compliance with ‘applicable legislation’ in timber producing countries ‘applicable legislation’ defined in line with the FLEGT definition

9. 9 Legal as in FLEGT: Use rights: Harvesting timber within legally gazetted boundaries by the legal holder of rights to harvest. Forest operations: Compliance with laws regarding forest management including relevant environmental and labour legislation. Fees and taxes: Compliance with laws concerning taxes, importation, royalties and fees directly related to timber harvesting and harvest rights. Other users: Respect for other parties’ legal tenure or use rights to land and other resources that may be affected by timber harvest rights, where such other rights exist. Trade and customs: Compliance with legal requirements for trade and customs procedures.

10. 10 Basic premises I  Objective: to minimise the risk of illegally harvested timber being sold on the EU market by requiring ‘due diligence’ from ‘operators’.  ‘Operator’: any legal or natural person supplying the EU market with timber products  ‘Due diligence’ a set of procedures aimed at avoiding trading in illegally harvested timber

11. 11 Basic premises II Basic premises II  Product scope: all timber and timber products, be it imported or domestically produced  Point of control: first placing on the EU market Importers for imported productsImporters for imported products Primary producers for domestically produced timberPrimary producers for domestically produced timber  Legality: defined on the basis of the legislation of the country of harvest Presumption of legality: FLEGT/CITES timber Presumption of legality: FLEGT/CITES timber

12. 12 Implementation process Implementation process  Entry into force when adopted by the European Parliament and the Council of EU Ministers.  European Parliament concluded in April ’09  Under Swedish Presidency, Council of Ministers called 4 mtgs in ’09, concluded in Dec ’09  “trialogue” concluded in June 2010; legislation adopted.  Implementation through complementary legislative process concluded in spring 2012; legislation operational and ready to bite.

13. 13 Conclusions Conclusions The EU FLEGT policy   combats illegal logging and related trade by a range of supply and demand-side measures, incentives and disincentives and technical and financial support.   Supports improved forest governance by furthering broad consultations, increased transparency and independent oversight in the forest sector of partner countries; and   in doing so contributes to sustainable forest management and sustainable development.   VPA’s and DDR supports the objective that all timber on the European market comes from low risk sources or be verified legal.

14. 14 Thank you! More FLEGT info on: http://ec.europa.eu/environment/forests/ illegal_logging.htm