1. New laws, new challenges
EUTR for VPA countries
A. Schulmeister & Emily Unwin
Chant
Source: European Space Agency

2. The EUTR a bit in detail What happens? What is expected?
EU timber regulation
The EUTR a bit in detail
What happens?
What is expected?

3. The EU timber regulation What is the current status?
The law will be applied from the 3 March 2013
The European Commission has developed implementing measures to specify certain aspects of the law, especially on due diligence but as well on monitoring organizations
The EC is developing guidance on other issues for companies such as “placing on the market”, compliance with applicable legislation etc. which is supposed to be ready latest by December 2012
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

4. Content of the EU timber regulation Prohibition and traceability
Operators that first place timber or timber products on the EU Market, are prohibited to place illegal timber or timber products on the EU market (importers, forest owners) and have to exercise due diligence by using a Due Diligence System
Traders that work further down the supply chain have to keep records of their suppliers and customers (one up, one down, includes retailers, if they do not directly import)
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

5. Content of the EU timber regulation Due Diligence
The key elements of the due diligence system are: access to information, risk assessment, risk mitigation (if the risk is not negligible)
Operators can set up their own system, use the system of an accredited monitoring organization or use another existing system (e.g. certification scheme) to fulfill the due diligence requirement [if it fulfills the requirements]
The operators remains responsible, if illegal timber is found in his supply chain
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

6. Content of the EU timber regulation
Monitoring organizations & certification systems
Monitoring organisations, who are accredited by the Commission according to certain criteria, can provide due diligence systems to operators [ apply can: trade federation, legality verification, certification etc.]
Certification systems, legality verification systems or equivalent can be used by companies to comply with due diligence
All providers of due diligence systems will be controlled by the EU Member States (rather less than more frequent)
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

7. Content of the EU timber regulation
Due Diligence II Information provision:
Trade name, type of product and common name of tree species [scientific name, if the common name is not clear]
Country of harvest, sub-national region [if risk of illegal logging is higher in that region], concession of harvest [certainly for round wood and sawn wood if risk between concession varies]
Quantity (in volume, weight or number of units)
Name and address of supplier and the trader supplied to
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

8. Content of the EU timber regulation
Due Diligence III Applicable legislation:
Provided of information showing compliance with:
Right to harvest in legally gazetted boundaries
Payments for harvesting rights and timber
Harvesting, incl. environmental and forest law, incl.forest management and biodiversity conservation, where directly related to timber harvesting
Third parties legal rights concerning use and tenure
Trade and customs
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

9. Content of the EU timber regulation
Due Diligence IV Risk assessment & mitigation
Operators needs to check:
Harvested timber complies with the applicable legislation
Illegal harvesting or practices incl. armed conflict occur in the country of harvest/sub-region
Are sanctions imposed by the UN Security Council or the EU Council
To analyze the complexity of the supply chain
If after the risk assessment a higher risk is identified, the operator needs to undertake risk mitigation measures
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

10. EU timber regulation
The EUTR and VPAs
How does it work?

11. Content of the EU timber regulation Role of VPA countries
Products accompanied by a FLEGT or CITES license will automatically be considered as being legal but:
Only if a VPA implements a FLEGT Licensing scheme, otherwise the company falls under the EUTR requirements
The licenses cover only those products named in the VPA agreement, all other fall under the EUTR requirements
FLEGT licenses will be checked by customs at import (shipment based), whether the documents are correct
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

12. Interaction with VPA’s
EU timber regulation
EU timber regulation
Interaction with VPA’s
Timber with a valid VPA license: Automatically recognized as legal under the EUTR
This reduces risk for EUTR operators: no need to take steps to show timber is legally harvested
If the EUTR is strongly enforced it will help create demand for VPA licensed timber
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

13. Interaction with VPA’s
EU timber regulation
EU timber regulation
Interaction with VPA’s
If the EUTR is not strongly enforced, industry demand for VPA licensed timber may diminish
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

14. Development of Consumer Market Laws re illegal logging
EU timber regulation
Development of Consumer Market Laws re illegal logging
What else is out there?

15. Consumer market laws Timeline 2008 - US Lacey Act amended
EU timber regulation
Consumer market laws
Timeline
US Lacey Act amended
EU Timber Regulation adopted
( Swiss Ordinance adopted)
Australian Illegal Logging Prohibition Bill passed by lower house.
If the EUTR is not strongly enforced, industry demand for VPA licensed timber may diminish
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

16. Consumer market laws US Lacey Act I Amended in 2008 to include timber
EU timber regulation
Consumer market laws
US Lacey Act I
Amended in 2008 to include timber
Prohibits trade in illegally sourced forest products
- Focus is legality in country of harvest
- The product must be traded in the USA
Import declarations are needed in some cases:
- Scientific species name, country of harvest, volume & value
Must exercise ‘due care’:
-Reasonable steps to reduce risk of trading illegal goods
Similar to EUTR ‘due diligence’ obligation
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

17. Consumer market laws US Lacey Act II Third Party verification
EU timber regulation
Consumer market laws
US Lacey Act II
Third Party verification
- not required -or accepted- as proof of legality
First enforcement case (against Gibson’s Guitars) settled in August 2012
Civil society had raised concerns about legality
Failure to seek information to check legality contributed to finding of fault
Penalty of over $600,000 including forfeit of illegally imported wood
Improvements to compliance systems required
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

18. Australian Illegal Logging Bill
EU timber regulation
Consumer market laws
Australian Illegal Logging Bill
Passed by House of Representatives in August 2012
Not yet law - still must be passed by Senate
Key provisions:
Prohibits import of illegally logged timber
Prohibit processing of illegally logged domestic timber
Due diligence as to risk of illegality must be exercised
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

19. Key overlaps of international laws
EU timber regulation
Consumer market laws
Key overlaps of international laws
Focus on legality in country of harvest
Information about timber is required
Regulated Party must:
take active steps to assess risk of illegality (due care / due diligence)
request relevant information about the timber, its source and legality
maintain records of information
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

20. Impacts for Timber Producers
EU timber regulation
Consumer market laws
Impacts for Timber Producers
Timber producers are not themselves regulated unless selling directly on EU/US/Australian markets
Buyers may ask timber producers for information about the timber – and evidence of legal harvest:
Species & location of timber harvest
Proof of legal right to harvest and transport permits
Proof of legal incorporation and compliance with customs laws
Civil society may present information indicating illegal logging to buyers & public authorities in EU/ US/Australia
Adequate financing: commitments from developed countries to provide long-term, adequate, predictable REDD financing – this will give countries confidence to do their part to achieve a global goal
All parties: REDD + to be designed to address the drivers of deforestion, in all places they do occur, whether in tropical forest countries or in others whose demand drives deforestation and degradation
Government level: gov to develop policies and land use plans that integrating various cross sectoral policies such as agriculture, energy, finance and trade
Private sector involvement is key: forestry, agriculture and extractive industries need to implement better management practices that are consistent with environmental and social safeguards and certification standards, while manufacturers, traders and end users must shift to sustainable procurement policies that reject products linked to forest destruction

21. Thank you
© 2010, WWF. All photographs used in this presentation are copyright protected and courtesy of the WWF-Canon Global Photo Network and the respective photographers.