With deforestation continuing apace, there is renewed debate in the international policy community as to whether an approach centred on legality in global supply chains is sufficient.
Greater awareness of the global scale and impacts of the unsustainable use of forest resources can be traced back to the 1990s. Initial efforts focused on voluntary initiatives for sustainable forest management and product supply chains, subsequently shifting towards a regulatory approach and one in which the need for broad sectoral reform was recognized.
A focus on sustainable forest management
Unlike many other environmental topics on the international agenda, no effective global agreement on forests has ever been reached. An attempt to negotiate one at the UN Conference on Environment and Development – also known as the ‘Earth Summit’ – in Rio de Janeiro in 1992 foundered on a lack of agreement between ‘developed’ and ‘developing’ countries. The latter wanted to ensure the right to exploit their sovereign natural resources, while the former wanted to discourage tropical forest countries from replicating those economic processes that had previously led to deforestation in the Global North.
However, a broad, non-binding commitment to the idea of sustainable forest management was reached, with agreement to the principle that: ‘Forest resources and forest lands should be sustainably managed to meet the social, economic, ecological, cultural and spiritual needs of present and future generations.’
Various processes were subsequently established to develop criteria and indicators for sustainable forest management. The International Tropical Timber Organisation (ITTO) pioneered this in the 1990s as a means to assess and monitor progress in tropical forests. The private sector and NGOs created voluntary forest certification schemes to verify forest management practices, the Forest Stewardship Council (FSC) being established in 1993 and the Programme for the Endorsement of Forest Certification (PEFC) in 1999.
The impact of all these initiatives on forest management remained limited, however. Sales of certified products grew, but remained small in volume and limited to niche markets. Certification systems proved far easier to implement in the Global North than in the Global South, where coverage was – and remains – very limited.
An increased focus on illegal logging
A focus on illegal logging offered an alternative approach. Awareness and understanding of the problem grew steadily, particularly around the turn of the 21st century. NGOs campaigned increasingly on the issue, and in 1996 the International Union for Conservation of Nature (IUCN) World Conservation Congress called for further study and action on illegal logging. The issue was picked up by the G8, and in 1998 it was included within the G8 Action Programme on Forests. This included commitments to assess the nature and extent of international trade in illegally harvested timber, and to evaluate the effectiveness of measures to control illegal activities. The response by G8 members was mixed, but the commitments made served to raise the profile of the issue.
Momentum for tackling the issue of illegal logging picked up further following a series of regional ministerial conferences on forest law enforcement and governance (FLEG), co-hosted by ‘consumer’ and ‘producer’ countries together with the World Bank. These took place in Indonesia in 2001, Cameroon in 2003 and Russia in 2005. These conferences marked the first international recognition that consumer-country action (to close their markets to illegal products) was a necessary accompaniment to producer-country action (to prevent illegal activities at source). In turn, attention became focused on the need for mechanisms to enable consumer countries to differentiate legal from illegal timber products.
The focus on timber legality rather than sustainability was in many ways a pragmatic decision. The assumption was that a definition of sustainability risked being developed through a top-down process with limited input from producer-country stakeholders, and that it would also be complicated to establish, given the absence of a globally agreed definition. In contrast, it was considered that legality definitions would be both supportive of national decision-making and easier to establish, as they would be based on the legal framework of each country.
Although the G8 Action Programme on Forests and the FLEG regional ministerial conferences led to relatively few concrete actions in themselves, they helped to raise the profile of the issue of illegal logging and trade. Notably, the meetings helped to trigger discussions within the EU that led to the adoption in 2003 of the FLEGT Action Plan.
The EU FLEGT approach
The EU FLEGT Action Plan encompasses a broad set of measures aimed at addressing illegal logging and forest governance. A core element of the action plan is the negotiation of bilateral Voluntary Partnership Agreements (VPAs) between the EU and timber-producing countries.
VPAs are negotiated through a process that is designed to enable national stakeholders to participate in decision-making on forest law enforcement, governance and trade. The EU offers incentives in the form of trade preferences for timber products that are licensed as legal (i.e. that have been issued with a FLEGT licence). This mechanism is combined with capacity-building assistance to partner countries to set up licensing systems, reform legislation and improve law enforcement. It was assumed that the VPAs would lead to a more profitable timber sector, which would absorb the costs of the timber legality and licensing systems; the EU was offering set-up rather than running costs.
Alongside the VPAs, the action plan included commitments to consider additional legislative options to prohibit the import of illegal timber; encourage voluntary industry initiatives and government procurement policy to limit purchases to legal sources; and encourage financial institutions to scrutinize investments in the sector.
The first of these commitments saw the introduction of the EU Timber Regulation (EUTR). Agreed in 2010 and coming into force in March 2013, the regulation prohibits the placing of illegal timber on the EU market. Notably, the development of the EUTR can be partly attributed to earlier moves in the US, where, as early as 2003, the President’s Initiative Against Illegal Logging was established. This was initially focused on supporting international forums and working collaboratively with trading countries. For example, memorandums of understanding on illegal logging were agreed with China and Indonesia, and provisions on forest governance and the illegal timber trade were included within the trade promotion agreement between the US and Peru.
The reform of the Lacey Act stimulated the EU to begin work on similar legislation, leading to the introduction of the EU Timber Regulation from 2013.
Although initially reluctant to close off the US market to illegal imports, in 2008 Congress voted to amend the 100-year-old Lacey Act, following a lobbying campaign led by the Lacey Coalition, a group of US NGOs and businesses. The 2008 amendment extended the prohibition on the import and sale of illegally produced wildlife to cover timber and wood products.
The reform of the Lacey Act stimulated the EU to begin work on similar legislation, which led to the introduction of the EUTR from 2013. As well as prohibiting the placing of illegally harvested timber and timber products on the EU market, the EUTR obliges timber operators to establish systems of due diligence to minimize the risk of their handling illegal timber products. Products accompanied by a FLEGT licence automatically meet the requirements of the regulation, thus providing an incentive to countries to agree and implement VPAs.
Other consumer countries have been influenced by these developments in the US and EU. Legislation similar to the EUTR and Lacey Act now exists in a number of countries in the Asia-Pacific region. Furthermore, the use of public procurement policies to grow the market for legal or sustainable timber products has been expanding. The impact of market access regulations and public procurement policies is discussed further in Chapter Three.
A roadmap for change
The theory of change underpinning these activities on forest law enforcement and governance was never explicit. The early years of discussions were characterized by an openness to find anything that seemed likely to work. The FLEGT initiative has been described as an ‘experimentalist’ regime that was ‘assembled piece by piece’, as well as one that was developed stepwise, and that had multiple objectives.
While pathways for change, targets and indicators were not clearly mapped out, the EU FLEGT Action Plan has three central elements. First, support for governance reforms in tropical forest countries to reduce the supply of illegal timber; second, promotion of demand-side measures to reduce the consumption of illegal timber; and third, establishment of trade measures to link the supply- and demand-side measures, with the support of dialogue and international collaboration.
Ultimately, through reducing illegal logging and trade, the EU hoped to foster sustainable forest management, while also improving rural livelihoods and supporting sustainable development more broadly.
With illegal logging recognized as undermining many of the EU’s development objectives, it was hoped that the action plan would help improve the effectiveness of EU development cooperation. Implicit within this was the assumption that, through strengthening legality, producer countries would be better able to harness the economic benefits from the sector, which could be used to support their national development objectives. The action plan notes that ‘it is through enhanced revenues that partner countries stand to gain most from reducing illegal logging’.
Recent developments
Recent trends have seen some challenges to this theory of change. The world’s timber trade has shifted greatly since the EU and US turned their attention to tackling illegal logging in the early 2000s, and they now exert a much less significant influence in global markets. China has seen rapid and sustained growth in industries transforming unprocessed wood-based products such as logs, sawnwood and pulp into finished and semi-finished products for export, and also, increasingly, for domestic consumption.
China is now by far the world’s largest importer of unprocessed products and the largest producer and consumer of most categories of wood-based products. China’s general approach has been not to seek to interfere in other countries’ internal affairs and to accept any products they choose to export, although in recent years it has taken some tentative steps to exclude illegal timber from imports (see Chapter Four).Other countries showing recent growth in imports and consumption, such as India and some Middle Eastern countries, have shown little interest to date in regulating their imports.
Many producer countries have also experienced growth in their domestic markets for wood-based products, which potentially lessens the impact of any measures taken by those countries to which they export. Despite the growing number of countries that have taken action, as well as attention from international forums, including the Asia-Pacific Economic Cooperation (APEC) and signatories to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a global framework for the control or elimination of illegal logging has not emerged.
Questions have been raised over the impact and cost-effectiveness of the FLEGT approach. A comprehensive evaluation of the action plan published in 2016 concluded that its overall design was ‘innovative, comprehensive and future-proof’, and that it had ‘clear EU added-value through its market leverage and increased political weight’. Also, the evaluation drew attention to the need for ‘a shift in geographical focus to non-VPA countries and focus on international coalitions’, and for greater attention to be paid to domestic timber markets.
In 2020–21, the European Commission also undertook a ‘fitness check’ of the VPAs and the EUTR. The findings of the fitness check were mixed, with the official report acknowledging that while there had been some successes in reducing the levels of illegal timber products being placed on the European market, it was unclear what impact there had been on illegal logging globally. The methodology and findings of the fitness check have been strongly criticized, with some civil society organizations pointing to genuine improvements in governance in many VPA countries which fell outside the scope of the assessment.
In addition, the last decade has seen growing recognition that illegal logging is not the only, nor even the most important, cause of deforestation. Worldwide, clearance of forests for agriculture is a more significant driver of forest loss than illegal, or legal, logging for wood-based products; in recent years, studies have suggested that agriculture is responsible for anywhere between 50 and 80 per cent of global forest loss.
Recognition of this trend has tended to reduce the focus on illegal logging for wood-based products, with attention being centred instead on policy options for tackling deforestation associated with the production and trade of forest risk commodities. Such policy initiatives are under way in a number of countries/regions, including China, the EU, Japan, the UK and the US.
Alongside these developments, there has been a growing awareness of the role and rights of indigenous peoples and forest communities in forest governance, management and conservation. This is a matter of substantial importance; the world’s remaining tropical forests are in many cases where indigenous peoples and traditional communities live and have their territories, and studies suggest that many such areas have deforestation rates significantly lower than those found elsewhere.
There has been a growing awareness of the role and rights of indigenous peoples and forest communities in forest governance, management and conservation.
This issue has been reflected to some extent in recent debates on the impact of business activities on human rights, as articulated, for example, in the UN’s Guiding Principles on Business and Human Rights, adopted in 2011, which describe the responsibility of companies to respect human rights in their operations and supply chains. Within the EU, for example, this has led to the drafting of legislation that requires businesses to exercise due diligence with regard both to potential human rights abuses and to environmental harms associated with their operations and supply chains.
All these developments raise questions as to the best route forward for international cooperation on forests: where the opportunities lie for future engagement, and what types of measures and interventions are most likely to be effective.
