With international attention focusing on reducing the impact of ‘forest risk’ commodities, important lessons can be drawn from two decades of efforts to tackle illegal logging.
Halting deforestation and forest degradation is critical if the increase in the global average temperature is to be kept to 1.5 or 2 degrees above pre-industrial levels. Yet global deforestation continues at an alarming rate, the result of the unsustainable production and consumption of natural resources. More than 430 million ha of tree cover has been lost since the beginning of this century. Annual rates of tree-cover loss have increased from an average of 17 million ha in the 2000s to 23 million ha in the 2010s, reaching 26 million ha in the early 2020s.
In recognition of this, attention is being given to finding ways to reduce pressure on forests and accelerate the transition to sustainable land-use models. One priority is tackling deforestation in international supply chains of ‘forest risk’ commodities – those agricultural, forest and mining commodities associated with deforestation.
This paper focuses on one group of these commodities, namely wood-based products – which include both timber and paper sector products – and particularly on those wood-based products that are sourced from tropical forest countries. It considers the effectiveness of international efforts to tackle illegality in their production and trade (commonly referred to as ‘illegal logging’), focusing mainly on the suite of measures that have resulted from the EU’s Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan, an initiative adopted in 2003. After two decades of action in the forest sector, there is a wealth of experience and knowledge on which to draw for the purposes of this study.
Thus, the aim of this paper is to identify the lessons that have been learned from these efforts, in order to support more effective policymaking and implementation in both the forest sector and other land-use sectors.
Following this introduction, which includes a discussion on the methodological approach, Chapter Two of the paper provides an overview of the changing narratives on tropical forests and timber in international policy debates. Chapter Three analyses important changes in the prevalence of illegal wood-based products in international trade. Chapter Four discusses the impact of reform efforts in the sector, focusing in turn on demand-side and supply-side measures, and Chapter Five provides a summary of the key findings and considers their implications for future initiatives.
Methodology
Chatham House has been monitoring forest governance and illegal logging since 2008. The methodology is based on a framework of criteria to assess three principal indicators: (1) levels of awareness of the issue of illegal logging; (2) the response of governments and the private sector to this issue; and (3) levels of illegal logging and international trade.
Three policy assessments have thus far been undertaken, in 2008 (covering 12 countries), 2013 and 2018 (each of which covered 19 countries). The findings of the first assessment were published in 2010 and those of the second assessment between 2013 and 2015. This paper presents the findings of the third and most recent assessment.
The study countries for the policy assessments were selected because of their relative importance in international trade and their level of engagement with international efforts to tackle illegal logging. They comprise nine tropical forest countries which are important producers of tropical timber (in 2015, they accounted for approximately 10 per cent of global exports of wood-based products in roundwood equivalent – RWE – volume) and 10 countries which are primarily consumers or processors of this timber (accounting for about half of all global imports of such products in 2015). The tropical forest countries are: Brazil, Cameroon, the Democratic Republic of the Congo, Ghana, Indonesia, Laos, Malaysia, Papua New Guinea and the Republic of the Congo. The ‘consumer’ and ‘processing’ countries are: China, France, India, Japan, the Netherlands, South Korea, Thailand, the UK, the US and Vietnam.
The methodology has been amended over the course of the initiative in response to changes in the sector and feedback from stakeholders. Prior to beginning the 2018 assessment, consultations were held with stakeholders to gauge opinions as to whether further assessments would be useful, and, if so, whether the methodology should be amended. The scope of the current assessment includes:
- Forest policy assessments, to determine the response of governments, based on an evaluation of their policy frameworks; and
- Illegality estimates, to assess the nature and extent of illegal logging and trade.
An assessment of levels of awareness of illegal logging, which had previously been implemented through a review of media in the target countries, was not repeated due to the difficulties of interpreting the findings and resource constraints. The response of the private sector was also not assessed, because others are engaged in this area.
The fact that changes have been made to the methodology requires caution to be exercised in any attempt to compare the findings from this latest policy assessment with previous results.
For the illegality estimates, the new methodology was applied in relation to the period 2000–18, so that changes over time are reported and assessed in this study. Thus, the numbers presented in this paper do not directly mirror those published in previous years.
Forest policy assessments: The policy assessments were undertaken in 2018–19. A framework of questions was used to assess the existence, design and level of implementation of forest sector policies in each of the project countries. The research was undertaken by country experts, who were provided with guidelines on scoring, and their assessment was reviewed by peers and by Chatham House.
The assessment framework includes five broad categories of questions for producer countries, and three categories for consuming and processing countries. A number of amendments were made for the 2018 assessment, with several policy areas being either added or covered in more detail. These were policies related to the small-scale timber sector (including smallholders, artisanal loggers, and small and medium-sized enterprises – SMEs – further down the supply chain), and consideration of gender in policymaking and implementation. Furthermore, questions on demand-side measures were added to the assessment of the producer countries – to align with the questions used for consumer and processing countries – in recognition of the fact that such approaches have been increasingly utilized in these countries. Please see the Annex for the full list of questions used in the assessments.
The initial findings from this research were published in 2019 as part of the New York Declaration on Forests (NYDF) Assessment, which was rebranded in 2022 as the Forest Declaration Assessment. The individual policy assessments for the countries included within this project are available on Chatham House’s Forest Governance website.
Illegality estimates: The methodology for assessing the nature and extent of illegal logging and trade was also amended. The previous method entailed making quantitative estimates for the proportion of illegal trade in specific supply chains, differentiating by destination, type of forest concession and level of certification.
For this assessment of illegality, undertaken in 2020–21, a simpler approach was adopted in order to improve transparency and facilitate feedback. Only the main products were considered, and no differentiation was made between supply chains for different destinations. Furthermore, rather than providing a single numerical estimate, a range of estimates was applied. Four categories of the likelihood of illegal practices were used: low (<10 per cent), low to medium (10–30 per cent), medium to substantial (between 30 per cent and 60 per cent) or substantial (>60 per cent). These were considered for five categories of illegal practice (described in more detail in Chapter Three):
- Customary tenure and resource rights;
- Award of permits;
- Forest management and harvesting;
- Forest sector payments and financing; and
- Transport and trade.
Based on the evaluation of these five categories, the overall likelihood of illegality in a supply chain was determined. Assessments of illegality were made for 37 countries that are important exporters of wood-based products. These included 13 of the project countries (the nine producer and four processing countries), and an additional 24 countries that were selected because they were considered likely to account for a high proportion of global exports of illegal wood-based products, based on documented evidence of weak governance.
To estimate the total volume and export value of illegal exports, the lower and upper estimates for the overall likelihood of illegality were applied to trade data for each of the main exported products. Consequently, the estimates are expressed as a range of values.
The assessments of illegality were based on the forest policy assessments, analysis of trade data, expert perception surveys, and a review of reports and secondary data. Draft assessments were presented in the form of ‘country notes’ and shared with country experts for review before being finalized. These notes are available to download on Chatham House’s Forest Governance website.
