Industry News

Vietnam ready to ratify FLEGT VPA with the EU

On Friday 18th November 2016 EU Environment Commissioner Karmenu Vella and Vietnamese Agriculture and Rural Development Minister Nguyen Xuan Cuong reached an ‘agreement in principle’ on the start of a FLEGT VPA between the European Union and Hanoi.

The news was reported by the European Timber Trade Federation (ETTF) alongside an EU statement remarking that the ‘substance of the deal’ was agreed and pending ‘technical, consistency and legal checks’ ratification is expected to start next year. 

The Forest Law Enforcement Governance and Trade Voluntary Partnership Agreement (FLEGT VPA) will see the implementation of a comprehensive timber legality assurance system, greater stakeholder engagement in the Vietnamese timber and forestry industry, and establishment of a monitoring and auditing framework. Once these are complete and authorised by EU and Vietnamese authorities, the country will be able to FLEGT licence its exports to the EU, exempting them from further due diligence by operator importers.

The aim of the measure is to combat illegal logging and illegal timber trade out of Vietnam. The focus is not just on timber and wood products based on material from its own forests, but also the major volumes it imports from around 80 countries across the rest of Asia and further afield and then processes and re-exports as finished goods. 

The VPA covers all major timber and wood product groups exported to the EU and Vietnam will also undertake to apply its legality assurance standard and systems to domestic timber and wood product sales and exports to other markets.

Vietnam’s wood-based exports to the EU in 2014 were worth around $705 million dollars, or between a quarter and a fifth of its total. This puts it third after the US and China as the country’s most important timber export market, and its sales there in the first eight months of last year were reported at US$436 million.

"Vietnam and the EU today celebrate a milestone in their cooperation in the global fight to end illegal logging," said Commissioner Vella. "Now we must focus on implementation to ensure that the VPA delivers on its social, environmental and economic goals.”

He added that the VPA would require "credible and robust systems involving all stakeholders and including effective mechanisms to detect violations and ensure law enforcement."

“The EU will continue to support Vietnam's efforts in this regard,” he said, “and we will be monitoring closely how it works to implement the VPA.”

Vietnam is one of 15 countries currently negotiating or implementing FLEGT VPAS. On November 15 Indonesia became the first to complete implementation and start issuing FLEGT licences. Its first licensed shipments are en route and expected in the EU in coming weeks. 

 

[News URL: http://cti-timber.org/content/vietnam-ready-ratify-flegt-vpa-eu]

Timber prices on the rise in UK market, says latest Forestry Commission Stats Report

The Forestry Commission has released its latest National Statistics on Timber Price Indices.

Timber Price Indices are based on sales by the Forestry Commission and Natural Resources Wales and consist of the Coniferous Standing Sales Price Index and the Softwood Sawlog Price Index. 

The key points from the latest release are listed below.

For the Coniferous Standing Sales Price Index:

  • There has been an overall increase in the index over the last 13 years, following an overall decrease in earlier years.
  • The index was 8.3% lower in real terms (7.6% in nominal terms) in the year to September 2016, compared with the previous year.
  • The average price for coniferous standing sales was £17.31 per cubic metre overbark standing in nominal terms in the year to September 2016, a decrease from £18.24 in the year to September 2015.  

For the Softwood Sawlog Price Index:

  • There has been relatively stable in recent years, following a long period of general decline.
  • The index was 13.6% greater in real terms (14.4% in nominal terms) in the 6 months to September 2016, compared with the corresponding period of the previous year.
  • The average price for softwood sawlog sales was £44.19 per cubic metre overbark in nominal terms in the 6 month period to September 2016, an increase from £38.63 in the 6 months to September 2015 and £41.34 in the 6 months to March 2016.

The complete report can be downloaded here.

 

[News URL: http://cti-timber.org/content/timber-prices-rise-uk-market-says-latest-forestry-commission-stats-report]

TTF questions WWF timber supply crunch scenario

The Timber Trade Federation (TTF) has released a note questioning the scenario of a future depletion of global tropical hardwood timber supplies in the next 30 years, as prospected by WWF in the report '100% Sustainable Timber Markets’ .

The WWF report - published in in July 2016 and downloadable here - warned that primary forest areas are being depleted at an alarming rate worldwide posing a direct threat to the viability of sawmills and other primary processors in the UK and other importing countries. The publication also addressed ways in which UK business could go about improving the future sustainability and security of timber supplies from exporter countries.

In its note, the TTF explains that the greatest share of the UK timber trade consists of softwood produced and imported from well managed and sustainable forest sources mainly from Scandinavia and Baltic countries. On the other hand, only 4.6% of UK timber imports are hardwood of which tropical hardwoods make up just a small percentage.

Nonetheless, the TTF recognises the need for increasing action on responsible timber sourcing as highlighted by TTF Head of Sustainability Mike Worrell: “The TTF has a continued priority to improve standards in responsible and sustainable sourcing policies across its membership. In line with this, we are working on a revised and improved version of our Due Diligence system, the Responsible Purchasing Policy (RPP). We have also recently been awarded a grant from the Department for International Development (DfID) to begin work on a project to promote better environmental and trade relations between UK importers and timber suppliers in China, Ghana and Cameroon. This very much falls in line with the suggestions of this WWF report and we look forward to our members leading the process through their engagement.”      

The TTF also notes that - with the EUTR now having been in place for the past 3 years and Indonesia scheduled to be the first country to issue FLEGT licenses in November - the issue of timber legality is set to represent a high priority for the UK and the EU.

"As more tropical timber exporting countries adopt FLEGT licensing and the EU maintains links with VPA countries, it is hoped that sustainable as well as legal forestry practises will become the norm. Ultimately, if tropical forests are not managed in a sustainable fashion, the global availability of tropical timber will collapse along with the business of their trade."

"Increased investment in sustainable forestry governance and management for timber production is one of the best ways to ensure the long term survival of tropical forests."

 

[News URL: http://cti-timber.org/content/ttf-questions-wwf-timber-supply-crunch-scenario]

ETTF releases special Newsletter focused on FLEGT licensing

The European Timber Trade Federation (ETTF) has issued a special edition of its Newsletter, specifically focused on FLEGT licensing.

The Newsletter - available here - marks the announcement that Indonesia will issue the first legality assurance FLEGT licences for timber and wood exports to the EU on 15 November 2016.

It also offers details from the JIC announcement and looks at the background and development of the Indonesia-EU VPA featuring an exclusive interview with EC Environmental Commissioner Karmenu Vella and reaction to the news and comment on expected market impacts of FLEGT licensing from across the EU trade.

Finally, the Newsletter shows the latest FLEGT VPA developments in Ghana and reports the launch of the FLEGT information point website www.flegtlicence.org.

"It has taken time to get here, resulting in a dip in FLEGT licensing awareness in the marketplace", said ETTF Secretary General André de Boer. "It has been a huge undertaking by Indonesia and the EU and hopefully will now give the wider FLEGT Voluntary Partnership  agreement initiative, and other suppliers involved, renewed impetus".

Mr de Boer added: "Indonesia’s success is just the start of the FLEGT licensing journey. We must also maintain pressure for strict, uniform enforcement of the EUTR EU-wide. Any weakness here is a disincentive to supply and buy FLEGT-licensed timber."

"That's why we need a virtuous trading circle with rigorous EUTR enforcement driving demand for FLEGT-licensed timber."

 

[News URL: http://www.cti-timber.org/content/ettf-launches-newsletter-focused-flegt-licensing]

Indonesia will be first country to export FLEGT licensed timber as from November 2016

Indonesia and the European Union today agreed that from 15 November 2016 Indonesia can issue ‘FLEGT’ licences to verified legal timber products it exports to the EU. 

The decision makes Indonesia the first country in the world to achieve this major milestone in the global effort to combat illegal logging and associated illegal timber trade. 

This agreement was made at the 5th Joint Implementation Committee, which oversees the implementation of the Indonesia-EU Forest Law Enforcement, Governance and Trade - Voluntary Partnership Agreement (FLEGT VPA). Indonesia and the EU signed the Agreement in Brussels on 30 September 2013, completing negotiations of the VPA. 

Indonesia has developed a system for assuring that all timber products harvested or imported, transported, traded, processed and exported comply with national laws on environmental, social and economic aspects identified by stakeholders from government, the private sector and civil society. The country’s timber legality assurance system, called Sistem Verifikasi Legalitas Kayu (SVLK), is subject to independent monitoring by civil society and periodic evaluation by an independent auditor. The implementation of the FLEGT licence means that the Indonesian SVLK meets the requirements of the VPA with the EU. 

“Indonesia has achieved great progress in bringing its forest sector under control and improving transparency, participation and other aspects of good forest governance through a process of dialogue and compromise among all stakeholder groups,” said Putera Parthama, Director General of Sustainable Forest Management at Indonesia’s Ministry of Environment and Forestry, and co-chair of the JIC. “By addressing legality we have built the foundation for sustainable forest management and action to address climate change. We have met the high certification standards of the EU.”

In addition to improving governance and increasing government revenues, the FLEGT licence benefits timber traders. FLEGT-licensed products automatically meet the requirements of the EU Timber Regulation, which prohibits operators in the EU from placing illegally harvested timber and products derived from illegal timber on the EU market. EU operators can therefore place FLEGT-licensed timber on the EU market without doing due diligence. 

The JIC also agreed on joint activities until the end of 2017 through which the EU and Indonesia will oversee the continual improvement of Indonesia’s timber legality assurance system and wider VPA implementation. The plan will address continuation of the multistakeholder process, data collection, independent forest monitoring, enforcement, and monitoring the EU market for FLEGT-licenced timber products. 

“The decision to begin FLEGT licensing is a landmark achievement in a partnership that links EU businesses and consumers with legal traders in Indonesia,” said Vincent Guérend, the EU Ambassador to Indonesia and co-chair of the JIC. “By guaranteeing legality, FLEGT licences should not only make business more efficient for traders in both Indonesia and the EU but also strengthen governance and ensure fairness to all forest stakeholders. They are the result of increasing transparency and better accountability and stakeholder participation in decisions about forests. Today, all of Indonesia’s timber exports are from independently audited factories and forests.” 

The EU has already completed internal procedures to recognise FLEGT licences from Indonesia. Competent authorities and timber importers in the 28 EU Member States are now preparing to receive the world's first shipments of FLEGT-licensed timber.

A report on the JIC meeting will be published on the websites of the Indonesia’s Ministry of Environment and Forestryand the EU Delegation to Indonesia, the EU FLEGT Facility and the Multistakeholder Forestry Programme.

For more information, click here or visit FLEGT.org.

 

[New URL: http://www.cti-timber.org/content/indonesia-will-be-first-country-export-flegt-licensed-timber-november-2016]

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