Establishing fair and sustainable forest economies

Lessons learned from tackling illegal logging

Research paper Updated 29 September 2022 ISBN: 978 1 78413 538 6 DOI: 10.55317/9781784135386

View of a conical hill where exactly half is covered in trees and half is bare.

Dr Alison Hoare

Associate Fellow, Environment and Society Centre

Dr Thiago Kanashiro Uehara

Former Research Fellow, Environment and Society Programme

Global demand for wood and paper products is increasing rapidly. While decades of work to tackle trade in illegal timber have established legal and sustainable supply chains for timber and wood-based products in many areas, the share of the global market supplied by illegal exports remains significant and the forest sector needs to contribute more effectively to sustainable development and the establishment of resilient land and forest economies.

Improvements in forest policy and governance underpin remarkable progress in some countries. In others, however, institutional and structural obstacles have meant that reforms have been poorly implemented, and illegal practices remain widespread. Efforts at sustainable forest management have been undermined in some producer countries, leading to deforestation together with a loss of revenues and other economic benefits for governments and citizens. Artisanal and small-scale timber producers have often been the hardest hit.

This paper considers the effectiveness of international efforts since 2003 to reduce illegality in supply chains for wood-based products, and the critical importance of cross-sectoral approaches, inclusive and transparent processes, and effective law enforcement. Applied to supply chains for forest risk commodities, inclusive approaches to both implementation and monitoring can help secure the effectiveness of ongoing forest governance reform.

03 Forest legality and sustainability

Although the proportion of illegal wood-based products traded internationally has declined over the last decade, improved legal compliance does not necessarily imply improved sustainability.

Discussion has re-emerged as to the merits, or otherwise, of focusing international reform efforts on legality or sustainability. As outlined in Chapter Two, in the context of the forest sector the focus for the last two decades has been primarily on legality, because this approach was seen as being more supportive of a country’s sovereignty, and was considered to be easier to implement, compared to approaches that were focused on sustainability. However, experience has shown that the reality is not quite so straightforward.

Defining legality in the forest sector

One of the issues faced when considering legality is that the legitimacy of state sovereignty may not be accepted by all national stakeholders. For example, customary legal frameworks may have a high level of social recognition and acceptance, but these are generally ignored, or are not adequately recognized within some countries’ formal legal frameworks. For instance, a 2020 review of 42 countries estimated that 49 per cent of their total land area comprised indigenous and local communities’ land, of which 46 per cent was not legally recognized.36

Similarly, artisanal and small-scale producers and enterprises are often not accounted for or regulated, which excludes them from operating legally, while some of their activities are banned in certain countries (see also Chapter Four). This is in spite of the fact that artisanal and small-scale producers provide most of the timber consumed in the domestic markets of many tropical forest countries, and play an important role in rural economies.37 Furthermore, certain legal principles that are well established in international law may not be reflected at the national level – for example, those related to human rights, labour rights or tenure of land and resources.

The laws in many countries are unclear and at times contradictory or incomplete.

A further challenge is that defining what is legal (and illegal) can be complicated. One reason for this is that opinions may differ as to the scope of laws that should be considered. For legislation regulating trade in timber, most definitions of legality or illegality refer to the legal framework of the country where the wood raw material of the products has been harvested. There are variations within this, with some definitions emphasizing particular aspects of the law. For example, the Lacey Act refers to ‘any foreign law’, and also specifies that regulations related to the fiscal regime are within scope.38 The EUTR refers to national legislation of the country of harvest as well as any ‘relevant international conventions’ to which the country is party. For the national legislation, five areas are identified as being applicable: rights to harvest within legally gazetted boundaries; payments for harvest rights and timber; timber harvesting, including environmental and forest legislation; third parties’ legal rights concerning use and tenure that are affected by timber harvesting; and trade and customs.39 The South Korean Act on the Sustainable Use of Timbers focuses on illegality with respect to non-compliance with regulations related to harvesting,40 and the definition of illegal logging developed by the APEC countries refers to domestic laws or regulations ‘related to the protection, conservation, or management of forests and timber’, also noting that countries may consider additional categories of law.41 As noted above, for some, such definitions are too narrow, particularly in failing to require compliance with certain international norms.

Another factor that can make defining legality complex is that the laws in many countries are unclear and at times contradictory or incomplete. This complexity has implications for those who are trying to comply with the law – this is particularly the case for artisanal producers and SMEs, which often have limited capabilities to evaluate and meet legal requirements. It also presents challenges for those seeking to enforce the law, whether within the country of production or further down the supply chain, for example, where there are market access regulations related to the legality of timber.

It is for these reasons that a fundamental element of the VPA negotiations has been to implement a national process for each partner country to define what constitutes legal timber.

Stakeholder engagement in defining legality

The national processes established under the VPAs to define what is legal in timber production and trade have proven to be transformative in some countries. These multi-stakeholder processes entailed reviews of national legal frameworks and prompted reforms where conflicting or weak laws were identified. Furthermore, they served to enhance the legitimacy of the law. For example, the new Forest Code in the Republic of the Congo was the result of such a process and has been met with a high level of support from civil society (although the implementing decrees have yet to be finalized).42 In Laos, the VPA supported wide-ranging forest sector reforms and helped to raise awareness of the legal framework and of the institutional responsibilities for its implementation.43

Of course, the process has not always been smooth, and the legality definitions agreed have at times been criticized for not adequately addressing certain areas of law. The legality definitions vary between countries, reflecting the particular national contexts and priorities of those engaged in the negotiations as well as their awareness of relevant issues. This has meant that some issues have not been adequately covered, while changes in the sector have also highlighted gaps. This has been the case, for example, in Indonesia, where the legality definition did not initially consider the issue of corruption in permit allocation, nor did it cover timber from customary forests. The former issue has in part been addressed, and sustainability certification can now be revoked in certain cases: for example, if there is a conviction for corruption linked to a company’s permits.44 The issue of timber from customary forests became a priority with the recognition of customary land rights by Indonesia’s Supreme Court in 2013.45 The need for customary forests to be integrated into the country’s Legality and Sustainability Assurance System (Sistem Verifikasi Legalitas dan Kelestarian – SVLK) is recognized in the VPA46 and options for implementing this are being explored.47

Negotiating legality definitions is not straightforward, and it has been more complex and time-consuming than originally foreseen. This in part reflects the weakness of the legal framework in many countries. Consequently, these processes have not simply entailed deciding on the scope of laws to be included within the legality definition, but have also required reviews of the existing legal framework and the elaboration of new or revised laws and policies.

A further complexity results from the fact that legality definitions cannot be seen as static. Rather, they need to be amended, as opinions on what issues (and thus, which areas of law) should be included are changeable, and because the law itself is subject to change.

Changes in law can of course be either positive – with the clarification of laws, or implementation of reforms that address existing inequities – or negative. There have been many cases over the last two decades in which the law has been changed to facilitate the exploitation of forests and forest lands to the detriment of sustainability. For example, the 2012 revision to Brazil’s Forest Code granted amnesties to those who had deforested land, exempting them from the requirement to restore forest cover on their property.48 Furthermore, in recent years, easing of social and environmental safeguards linked with the approval process for changes in land use has been reported in a number of tropical forest countries, as governments have sought to boost short-term economic growth following the COVID-19 pandemic.49

These issues have come to the fore in recent discussions of policy measures to address deforestation in supply chains, with debate centring on whether such measures should target only illegal practices, or all deforestation – an issue which will be revisited below.

Assessing types of illegal practices and their prevalence

As noted above, defining illegality is complicated. To try and understand how the nature and scale of illegal practices have changed over the last two decades, the approach adopted for this analysis was to take a broad definition of illegality. Thus, it is assumed to include illegal practices as recognized within national definitions, as well as contentious practices, which are those prohibited in international law or norms but not necessarily embedded within national definitions of legality.

This approach was adopted in recognition of the fact that, even if contentious activities are not illegal under a particular national framework, they often serve to undermine confidence in government and can conflict with best practice for sustainable and equitable forest and land use. Consequently, the analysis presented here does not necessarily reflect the risk of non-compliance with regulations aimed at controlling the trade in illegal timber. Rather, it serves to highlight where there may be a need for further scrutiny and debate – by those in government, as well as the private sector and civil society.

Five categories of illegal practice were chosen, as follows.50

Customary tenure and resource rights:
- Free, prior and informed consent (FPIC) not obtained from affected people or communities; or
- The rights of affected peoples or communities not adequately taken into consideration and addressed in the process of allocating permits or developing management plans; and any loss of rights not adequately compensated.
Award of permits:
- Environmental impact assessments (EIAs) not conducted in accordance with legal requirements;
- Legally required process not followed in decision-making for the award of permits, e.g. calls for tenders not published; technical requirements for selection of bids not followed; corruption influences decision-making; or
- Use of proxy companies by an entity that would otherwise be ineligible for being granted a permit.

Forest management and harvesting:
- Management plans not developed or implemented, e.g. plans do not meet legal requirements; logging in restricted areas; overharvesting of particular species, etc.;
- Health and safety and/or labour laws not complied with, e.g. no provision of safety equipment; employment of illegal immigrants; non-payment of salaries or of minimum legal wage; or
- Environmental legislation not complied with, e.g. logging of protected areas or species; non-compliance with requirements for protection of wildlife; pollution of water courses.
Forest sector payments and financing:
- Relevant royalties, fees, taxes and fines not paid, or not paid in full;
- Benefit-sharing agreements with local communities not complied with;
- Fraudulent financing /money laundering by concessionaires or in relation to mills; or
- Illegal forms of transfer pricing.
Transport and trade:
- Export bans or quotas breached or exceeded for certain species or products;
- False declarations made; e.g. misdeclarations of species, value or source; or
- Non-compliance with CITES requirements.

Some of these – notably, the first two categories, ‘customary tenure and resource rights’ and ‘award of permits’ – are somewhat different in nature to the others. This is because illegalities in these categories are likely to be intractable. As such, unless there have been robust processes to address such illegal practices, they will affect the legality of all subsequent production. For example, if the process of granting a permit involved corruption, or if a logging permit was granted on land for which existing land rights were not recognized, the timber subsequently produced under these permits is considered illegal.

Addressing such issues, particularly where the illegal practices took place in the past, is challenging. However, it is possible to do so, for example, through a review of existing permits. Such a process was implemented in the Democratic Republic of the Congo (DRC) in the late 2000s, with the cancellation of 76 out of 156 concessions51 – although widespread breaches have since been reported.52 A further review of all forestry concessions is to be implemented in 2022.53

Key findings

Analysis for the 37 countries included in this study indicates that, globally, the proportion of illegal trade in wood-based products has declined in the past 20 years, with respect to both volume and export value.54 However, there has been an absolute increase in these volumes, in particular between 2000 and 2008, because of an overall increase in international trade. (Detailed analysis for each of the project countries is provided in the country notes.)55

Figure 1. Volume of legal and illegal exports of wood-based products, 2000–18, total from 37 study countries

— Source: Chatham House illegality estimates.

Figure 2. Value of legal and illegal exports of wood-based products, 2000–18, total from 37 study countries

On the assumption that all other countries’ exports are entirely legal, it can be estimated that this illegal trade on the part of the 37 study countries accounted for at least 9 per cent of global exports in 2000, and 4 per cent in 2018, by volume; and for a minimum of 8 per cent in 2000 and 3 per cent in 2018, by value. Using the upper estimates for illegal trade (i.e., the worst-case scenario), the proportion of illegal trade can be estimated at up to 19 per cent in 2000 and 14 per cent in 2018, by volume; and up to 15 per cent in 2000 and 11 per cent in 2018, by value (Table 1).

These estimates hide significant variation both between countries and supply chains, with the picture being dominated by a few countries, and so it is useful to consider the disaggregated estimates.

Table 1. Estimated total illegal exports of wood-based products in 2000–18 from 37 countries, and as a proportion of all exports of wood-based products from these countries and globally

	Estimated export volume (million m3 roundwood equivalent/% of total)				Estimated export value ($ billion, fob,56 at nominal prices/% of total)
	2000	2008	2013	2018	2000	2008	2013	2018
All exports – 37 selected countries	224	339	399	492	33	83	111	133
Illegal exports – 37 selected countries	53–106	56–124	41–129	40–144	8–16	12–28	9–29	7–30
Illegal exports as % of 37 selected countries’ total exports	23–48%	16–37%	10–32%	8–29%	24–48%	14–33%	8–27%	5–23%
Total exports – global	570	770	890	1020	104	203	242	264
Illegal exports from 37 selected countries as % of global exports	9–19%	7–16%	5–15%	4–14%	8–15%	6–14%	4–12%	3–11%

Source: Chatham House estimates.

Sources of illegal wood-based products

The timber and paper sectors are quite distinct (Figures 3–6). For the timber sector, in some parts of the world illegal exports are on a downward trend. This has been particularly marked in Indonesia and Malaysia, reflecting improvements in governance in both countries. For Malaysia, the decline in illegal exports also reflects an increase in production from certified plantations as well as an overall decline in exports, in particular from the states of Sabah and Sarawak, where illegal practices have been more prevalent.

Elsewhere, however, illegal timber exports are estimated to have increased. This is most notable in Russia. Illegal practices are widespread in the country’s eastern regions, where production has increased rapidly over the last two decades, mainly to supply the timber-processing industry in China. In terms of smaller countries, illegal exports are also estimated to have increased in Papua New Guinea and the Solomon Islands. Exports from both countries have continued to grow over the past 20 years, but there has been little evidence of improvements in forest governance in either. Lastly, central African countries account for a relatively small proportion of global exports, but illegal practices continue to be widespread across many supply chains.

Central African countries account for a relatively small proportion of global exports, but illegal practices continue to be widespread across many supply chains.

For the paper sector, the range of estimated illegal exports (i.e. the difference between the upper and lower estimates) has widened in the last two decades. The primary reason for increases in the upper estimates is the growth of trade in the paper sector. The illegalities pertaining to the sector tend to be intractable, and many remain to be resolved. Hence, the increase in trade has resulted in a commensurate increase in illegal exports.

The picture is dominated by Indonesia, where the majority of exports for the paper sector are sourced from plantations whose legality is contested because of allegations of corruption in the allocation of permits, failure to respect customary rights, and certain financial practices among parent companies.57 Some of these issues are not included within the country’s current definition of legality, and so they were not reflected in the lower estimates of illegality. The importance of these issues for establishing a sustainable and equitable sector is acknowledged by the Indonesian government, and efforts are under way to address a number of them – including for example, a process to allocate customary forests. However, progress has been slow, and these issues are yet to be resolved for a significant number of concessions and plantations.

Figure 3. Volume of legal and illegal exports of timber, 2000–18, selected geographies

Figure 4. Value of legal and illegal exports of timber, 2000–18, selected geographies

Figure 5. Volume of legal and illegal paper sector exports, 2000–18, selected geographies

Figure 6. Value of legal and illegal paper sector exports, 2000–18, selected geographies

For many stakeholders, natural tropical forests – rather than plantations – have been the main focus of efforts to establish legal and sustainable forestry, and so it is useful to take a more detailed look at those products (here termed ‘tropical timber’ products).58

For tropical timber products, the volume of illegal log exports (see Figures 7–8) is estimated to have remained at roughly the same level between 2000 and 2018, although the countries of origin have changed. Illegal exports of logs from Malaysia are estimated to have decreased, and those from the Mekong region (Cambodia, Laos and Myanmar), Papua New Guinea, the Solomon Islands and the Congo Basin to have increased. However, in terms of export value, measured in US dollars and at nominal prices (Figures 9–10), illegal exports of logs are estimated to have doubled between 2000 and 2013 before declining in the period to 2018, albeit to a higher level than was observed during the 2000s. This contrasting trend in export values is in part a reflection of rising nominal prices for all tropical timber products, and is also linked to the increased share of illegal exports that is represented by higher-value logs – in particular, rosewood – from the Mekong region (in the period to 2013) and from several African countries.

For many stakeholders, natural tropical forests – rather than plantations – have been the main focus of efforts to establish legal and sustainable forestry.

For all other tropical timber products – sawnwood, mouldings, veneer and plywood – illegal exports are estimated to have declined, both in terms of volume and export value. As noted above, this has primarily been because of developments in Indonesia and Malaysia, where there have been improvements in governance and declining export volumes in some supply chains.

For the other timber sector products, which include those predominantly sourced from plantations and in non-tropical regions, the proportion of illegal production is estimated to have declined. Exceptions are Russia’s and (on a lesser scale) Romania’s exports of sawnwood (see Figures 3–4). Hence, the problem of illegal production and trade is not limited to tropical forest countries, but is also an issue in temperate forests.

Figure 7. Volume of illegal exports of tropical timber products, lower estimates, 2000–18, selected supplying countries/regions

— Note: Tropical timber is defined here as logs, sawnwood, mouldings, veneer and plywood likely to derive wholly from natural forest and supplied direct from the tropical country of its origin.

Figure 8. Volume of illegal exports of tropical timber products, upper estimates, 2000–18, selected supplying countries/regions

Figure 9. Value of illegal exports of tropical timber products, lower estimates, 2000–18, selected supplying countries/regions

Figure 10. Value of illegal exports of tropical timber products, upper estimates, 2000–18, selected supplying countries/regions

Destinations for illegal wood-based products

Over the last two decades, the EU, Japan, the UK and the US have become less important as destination or import markets for illegal timber and paper sector products, while China has become more important – as has Vietnam, albeit to a far lesser extent (Figures 11–14). This change has been most marked with regard to the timber sector. It reflects the emergence of both China and Vietnam as processing hubs, as well as expanding domestic consumption in China. Since 2015, China’s processing sector has increased its supplies from lower-risk sources of timber, such as Australia and Germany;59 however, there continues to be strong demand in the domestic Chinese market for high-value tropical hardwood, much of which comes from high-risk sources.

Figure 11. Volume of global exports of illegal timber sector and paper sector products, lower estimates, 2000–18, by destination

Figure 12. Volume of global exports of illegal timber sector and paper sector products, upper estimates, 2000–18, by destination

Figure 13. Value of global exports of illegal timber sector and paper sector products, lower estimates, 2000–18, by destination

Figure 14. Value of global exports of illegal timber sector and paper sector products, upper estimates, 2000–18, by destination

A return to the question of legality and sustainability

In many countries there has been an increase in the proportion of wood-based products coming from the clearance of forests and from plantations (see Box 1). These two modes of production are linked to varying degrees, depending on the extent to which forests are cleared for wood plantations, rather than for other economic activities, such as for agriculture or infrastructure development. The trend towards increased production from plantations is also forecast to continue.60

Box 1. Plantations and forest clearance as sources of logs in Laos and Indonesia

In Laos, log production from forest clearance (linked with infrastructure projects, mining and wood plantations) became increasingly important between 1990 and 2010, accounting for 80 per cent of official production at the end of this period.61 This share subsequently declined, in part due to the introduction of a moratorium on wood plantations and mining concessions in 2012.62 The ban was partially lifted in 2018, and it has been forecast that plantations will become the main source of domestically produced logs in the coming years.63

In Indonesia, plantations replaced natural forest concessions as the main source of logs (for large timber processors) in 2000, and logs from forest clearance also became increasingly significant over the following decade.64 The vast majority of log production is now from plantations: in 2019, 39 million m3 of logs were from plantations, compared to 6 million m3 from natural forest concessions.65

This change in the sourcing of wood-based products has two implications. Firstly, it changes the types and risks of illegal practices. The risks of illegality are low in many contexts. For example, this is the case in Brazil, Thailand and Vietnam, where there are long-established plantations. (In the case of the latter two countries, these are mainly owned by smallholders.) The same is also true in Ghana, where there has been a more recent expansion in plantations, but this has generally been well regulated. Elsewhere, however, the legality risks are higher. This has been documented in both Laos and Indonesia – in the case of the latter, for example, with respect to the paper sector (as noted above). In the case of Laos, legal compliance is made challenging by the complexity of the legal framework for smallholders.66

The laws for forest clearance are often less clear, and non-compliance has been widely documented. In a 2021 report, Forest Trends estimated that more than two-thirds (69 per cent) of tropical forest conversion for agriculture and pulp plantations between 2013 and 2019 took place ‘in violation of national laws and regulations’.67 In many countries, most of the timber from forest clearance is destined for domestic markets, but it also enters international supply chains. For example, in the same study, Forest Trends reported that nearly two-thirds of timber exported by Papua New Guinea originates from illegal clearance conducted under agricultural permits.68

Where forest clearance and plantation establishment are linked with high incidences of illegality, improving compliance with the law should also strengthen sustainability.

The changing nature of illegal practices has been recognized in many countries. In the context of some of the VPA processes, for example, national definitions of legality have been amended so that they include conversion timber (that is, timber resulting from the clearance of forests in order to convert the land to other uses, such as agriculture or mining), this having been previously omitted from national definitions. However, the fact that decisions regarding forest conversion often involve government departments in other sectors significantly broadens the scope of the governance reforms that may be needed and of the expertise necessary for enforcement officials to check compliance.

The second implication of changes in the sourcing of wood-based products is for sustainability. Forest clearance and wood plantations (which are typically monocultures) can have negative impacts on biodiversity, water, soil and rural livelihoods. In many contexts, the legal framework requires the social and environmental impacts of these land uses to be considered prior to the approval of permits, but such processes are often not implemented.

Where forest clearance and plantation establishment are linked with high incidences of illegality, improving compliance with the law should also strengthen sustainability. However, clearly it cannot do so where the legal framework does not include strong sustainability provisions.69

Such situations have raised questions about whether a focus on legality can achieve broader sustainability goals, as has been seen in some of the discussions about legislation aimed at reducing deforestation in supply chains. The UK has decided to focus on illegal deforestation70 and the US is also considering such an approach,71 while the EU has proposed legislation that would require products to be both legally produced and ‘deforestation free’ (the latter also including forest degradation).72

Defining deforestation is no less challenging than defining sustainability: the question of whether net or zero deforestation should be the target has already proved contentious.73 One lesson that is clear from the forest sector is that establishing precisely what is meant by forests and deforestation is dependent on particular national contexts and on the priorities and needs of stakeholders in the producer countries. Many producers of forest risk commodities have precarious livelihoods; issues of food and economic security need to be integral to the design and implementation of policy measures to ensure that these are just. Linked to this, unless demand-side measures align with the priorities of producer countries and their citizens, they are unlikely to be effective – either supply chains will simply be diverted to other markets, or cooperation on enforcement and traceability will be minimal.

Rights and Resources Initiative (2020), Estimate of the area of land and territories of Indigenous Peoples, local communities, and Afro-descendants where their rights have not been recognized, Technical Report, https://rightsandresources.org/wp-content/uploads/Area-Study-v2021.pdf.

Tacconi, L. et al. (2016), ‘Defining Illegal Forest Activities and Illegal Logging’, in Kleinschmit, D., Mansourian, S., Wildburger, C. and Purret, A. (eds), Illegal Logging and Related Timber Trade – Dimensions, Drivers, Impacts and Responses: A Global Scientific Rapid Response Assessment Report, IUFRO World Series Volume 35, Vienna: International Union of Forest Research Organizations.

Animal and Plant Health Inspection Service, US Department of Agriculture (2021), ‘Lacey Act’, 21 December 2021, https://www.aphis.usda.gov/aphis/ourfocus/planthealth/import-information/lacey-act?msclkid=92518c81aabb11ec94a325d5a3bfde55.

See the Preamble, section 14; and Article 2(h), on the definition of applicable legislation. European Commission (2010), ‘Regulation (EU) No 995/2010 of the European Parliament and of the Council of 20 October 2010 laying down the obligations of operators who place timber and timber products on the market Text with EEA relevance’, October 2010, Official Journal of the European Union, L 295/23, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32010R0995.

Food and Agriculture Organization of the UN, FAOLEX Database (2022), ‘Republic of Korea: Act on the Sustainable Use of Timbers (No. 11429 2012)’, https://www.fao.org/faolex/results/details/en/c/LEX-FAOC136715.

Asia-Pacific Economic Cooperation (2015), APEC Common Understanding of the Scope of Illegal Logging and Associated Trade, paragraph 3, https://www.apec.org/docs/default-source/groups/egilat/15_sce3_017_zcommon-understanding-of-scope-of-ilat.docx?sfvrsn=87c63a0c_1.

Bollen, A. (2020), Evaluating the VPA process in the Republic of Congo: Views from civil society, Brussels: Fern, https://www.fern.org/publications-insight/evaluating-the-vpa-process-in-the-republic-of-congo-2110.

Smith, H. (2018), Assessment of reforms related to the FLEGT-VPA in Lao PDR, Executive summary, EFI; To, P. X. and Boutthavong, S. (2021), Survey of timber operator in Lao PDR: Current situation and policy implications, FLEGT Laos, https://flegtlaos.com/wp-content/uploads/formidable/8/InfoBrief_Operator-Survey_Final_EN-21-10-21.pdf.

The robustness of the mechanisms for revoking certification in such cases has been questioned, however, see Rainforest Action Network (2015), False Assurances: A briefing for international buyers and customs authorities on how Indonesia’s timber legality verification system fails to protect community rights, https://www.ran.org/wp-content/uploads/2018/06/RAN_False_Assurances_LOW.pdf.

Johnson, C. (2013), ‘Indonesia: Forest rights of indigenous peoples affirmed’, 3 June 2013, https://www.loc.gov/item/global-legal-monitor/2013-06-03/indonesia-forest-rights-of-indigenous-peoples-affirmed.

Amendment to Annex V of the VPA, in Commission Decision (EU) 2015/1158, 8 July 2015, notes that ‘Changes in the procedures for utilization and/or administration of timber from Customary Forests, to address implementation of Constitutional Court Decision (MK) No 35/PUU-X/2012, shall be introduced after the adoption of related implementing legislation.’ European Commission (2015), ‘Commission Decision (EU) 2015/1158 of 8 July 2015’, July 2015, Official Journal of the European Union, L 187/30, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32015D1158&from=EN.

Wicaksono, S. A. (2021), ‘Customary forests and timber management: a way forward in Indonesia’, EUREDD Facility Blog, 28 July 2021, https://www.euredd.efi.int/blog/-/blogs/customary-forests-and-timber-management-a-way-forward-in-indonesia; Broadhead, J., Steni, B. and Hinrichs, A. (2018), Implementing SVLK in customary forests, EU FLEGT REDD Facility and EFI, https://euredd.efi.int/integrating-customary-forests-indonesia-legality-assurance-system.

Guidotti, V. et al. (2017), Números detalhados do novo Código Florestal e suas implicações para os PRAs, Piracicaba, SP: Imaflora, https://observatorioflorestal.org.br/wp-content/uploads/bkps-old/2018/02/numeros_detalhados_codigo_florestal_e_suas_implicacoes_para_os_pras.pdf.pdf.

Dil, S., Ewell, C., Wherry, A. and Doyle, C. (2021), Rolling back social and environmental safeguards in the time of COVID-19: The dangers for indigenous peoples and for tropical forests, Discussion Paper, Middlesex University, Lowenstein International Human Rights Clinic, Yale Law School and Forest Peoples’ Program, https://www.forestpeoples.org/sites/default/files/documents/Rolling%20Back%20Social%20and%20Environmental%20Safeguards%20-%20Global%20Report%20ENGLISH%20FINAL.pdf.

This list draws on the various categorizations of illegal practice that have been made, including: the Sourcing Hub developed by Preferred by Nature (https://preferredbynature.org/sourcinghub/timber/timber-democratic-republic-congo), WWF’s TRAFFIC timber legality framework (https://www.traffic.org/site/assets/files/6500/common-framework-for-assessing-legality-of-forestry-operations.pdf), the Open Timber Portal (https://opentimberportal.org/observations), and APEC’s national timber legality guidance (see https://www.apec.org/Groups/SOM-Steering-Committee-on-Economic-and-Technical-Cooperation/Working-Groups/Illegal-Logging-and-Associated-Trade), as well as country overviews prepared by the UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC) to aid implementation of the EUTR. Examples have been provided for the types of illegal activity that each category can include. These are not comprehensive, nor is each of them found in every country or region.

Centre d’Etudes Pour l’Action Sociale (CEPAS) research report, unpublished. See http://cepas.online.

Democratic Republic of the Congo, Presidency of the Republic, General Inspectorate of Finance (2020), Rapport de mission relatif au contrôle de la légalité des allocations et cessions des concessions forestières et des droits dus au Trésor public par les exploitants forestiers formels [Mission report on the control of the legality of the allocations and transfers of forest concessions and rights due to the public treasury by formal loggers], https://medd.gouv.cd/wp-content/uploads/2022/04/Rapport-de-mission-relatif-au-controle-de-la-legalite-des-allocations-et-cessions-des-concessions-forestieres-et-des-droits-dus-au-Tresor-public-par-les-exploitants-forestiers-formels.pdf.

Central African Forest Initiative and Government of the Democratic Republic of the Congo (2021), ‘Letter of Intent and Country Allocation’, 2 November 2021. http://www.cafi.org/sites/default/files/2022-03/EB.2021.18%20-%20Letter%20of%20Intent%20with%20the%20DRC%202021-2031%20with%20annexes_0.pdf.

The analysis for the project countries is available in the country notes, published online at Chatham House Forest Governance and Legality, https://forestgovernance.chathamhouse.org.

See country notes at Chatham House Forest Governance and Legality, https://forestgovernance.chathamhouse.org.

Free on board.

See, for example, Jong, H. N. (2020), ‘Pulp producers pull off $168 million Indonesia tax twist, report alleges’, Mongabay, 2 December 2020, https://news.mongabay.com/2020/12/pulp-paper-toba-pulp-lestari-april-tax-export-report; Wakker, E. (2014), Indonesia: Illegalities in Forest Clearance for Large-scale Commercial Plantations, Washington, DC: Forest Trends, https://www.forest-trends.org/publications/indonesia-illegalities-in-forest-clearance-in-large-scale-plantations. For further details, see Indonesia country note at Chatham House Forest Governance and Legality, https://forestgovernance.chathamhouse.org/countries/indonesia.

‘Tropical timber products’ include logs, sawnwood, mouldings, veneer and plywood that derive from natural forest, considering only those supplied direct from the tropical country of their origin. The estimates take into account the sum of all quantities supplied from tropical countries other than Thailand and Vietnam and reported in official trade statistics with customs codes commencing with 4403, 4407, 4408, 4409, and 4412 (referred to herein as logs, sawnwood, veneer, mouldings, and plywood, but with several exceptions). A number of other supply chains have also been excluded: wood from Brazil; logs which, given their export value per unit of volume, are likely to derive from plantations; logs and sawnwood likely to comprise teak (especially if recorded as imports of teak by India) from countries other than Myanmar; and, for Indonesia only, customs codes (other than 441231 and its predecessor codes) commencing with 4412.

Chatham House resourcetrade.earth (2022), Fastest growing (2015–2020), https://resourcetrade.earth/?year=2020&category=28&units=value&autozoom=1 (accessed 29 June 2022).

Held, C., Meier-Landsberg, E. and Alonso, V. (2021), Tropical timber 2050: an analysis of the future supply of and demand for tropical timber and its contributions to a sustainable economy, ITTO Technical Series No. 49, Yokohama: International Tropical Timber Organisation, https://www.itto.int/direct/topics/topics_pdf_download/topics_id=6750&no=1&disp=inline.

Smirnov, D. (2015), Assessment of Scope of Illegal Logging in Laos and Associated Trans-Boundary Timber Trade, WWF, https://wildleaks.org/wp-content/uploads/2016/07/CarBi-assessment-of-scope2.pdf; Baird, I. G. (2009), Quotas, Powers, Patronage and Illegal Rent-Seeking: The Political Economy of Logging and the Timber Trade in Southern Laos, Forest Trends, https://www.forest-trends.org/wp-content/uploads/imported/Baird_Timber_Trade_and_Patronage_Laos_Final.pdf; LTS International (2012), Study for Understanding Timber Flows and Control in Lao PDR.

Smith, H. et al. (2020), Rubber Plantation Value Chains in Laos: Opportunities and Constraints in Policy, Legality and Wood Processing, report produced for ACIAR project: Advancing enhanced wood manufacturing industries in Laos and Australia, Forest Trends, https://www.forest-trends.org/wp-content/uploads/2020/07/Rubber-Plantation-Value-Chains-in-Laos.pdf.

UNIQUE GmbH (2021), Analysis of the Forestry and Wood Processing Sector in Laos, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), https://flegtlaos.com/wp-content/uploads/formidable/8/20211119_Analysis_of_the_Forestry_and_Wood_Processing_Sector_in_Laos_EN.pdf.

See Figure 5, Forest Trends and Koalisi Anti-Mafia Hutan (2015), Indonesia’s Legal Timber Supply Gap and Implications for Expansion of Milling Capacity: A Review of the Road Map for the Revitalization of the Forest Industry, Phase 1, Forest Trends, Figure 5, https://www.forest-trends.org/wp-content/uploads/imported/for165-indonesia-timber-supply-analysis-letter-15-0217_smaller-pdf.pdf.

Ministry of Environment and Forestry, Republic of Indonesia (2020), The State of Indonesia’s Forests 2020, Table 6.3.

UNIQUE GmbH (2021), Analysis of the Forestry and Wood Processing Sector in Laos.

Dummett et al. (2021), Illicit Harvest, Complicit Goods. The commodities considered were beef and leather, palm oil, pulp and paper, soy, rubber, cocoa, coffee and maize.

For example, illegal practices in the allocation of these agricultural permits have included violations of land rights, and incidences of fraud and corruption. See Global Witness (2017), Stained Trade: How U.S. imports of exotic flooring from China risk driving the theft of indigenous land and deforestation in Papua New Guinea, https://www.globalwitness.org/en/campaigns/forests/stained-trade. Such illegal exports are estimated to account for 63 per cent of timber exports. See Dummett et al. (2021), Illicit Harvest, Complicit Goods, p. 16.

Dummett et al. (2021), Illicit Harvest, Complicit Goods.

UK Department for Environment, Food & Rural Affairs (2020), ‘Government sets out world-leading new measures to protect rainforests’, press release, 11 November 2020, https://www.gov.uk/government/news/government-sets-out-world-leading-new-measures-to-protect-rainforests.

Schatz, B. (2021), ‘Schatz, Blumenauer Unveil New Bipartisan Legislation To Help Stop Illegal Deforestation Around The World, Fight Climate Change’, press release, 10 June 2021, https://www.schatz.senate.gov/news/press-releases/schatz-blumenauer-unveil-new-bipartisan-legislation-to-help-stop-illegal-deforestation-around-the-world-fight-climate-change.

European Commission (undated), ‘Proposal for a Regulation on deforestation-free products’, https://ec.europa.eu/environment/forests/deforestation-proposal.htm.

Hoare, A. (2021), ‘How to ensure the COP26 forest declaration is a success’, Chatham House Expert Comment, 23 November 2021, https://www.chathamhouse.org/2021/11/how-ensure-cop26-forest-declaration-success.

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