Penny Mordaunt, the new head of the UK Department for International Development (DFID), has highlighted the need for the UK to expand trade with developing countries and build competitive markets to end poverty as it leaves the EU. On the same day she made these comments, Indonesia and the EU celebrated the first anniversary of FLEGT (Forest Law Enforcement, Governance and Trade) licences being issued, a programme DFID has supported since 2002.
If Mordaunt wants to achieve her goal, she will need to look at continuing and building on the success of initiatives like this.
More than just a trade deal
Indonesia’s FLEGT licences provide verification that timber products have been legally produced, according to the country’s own laws and regulations, and can be freely traded with the EU without the need for importers to carry out extra due diligence.
The licence is the final piece in the Voluntary Partnership Agreement (VPA) puzzle, a bilateral trade agreement between the EU and a timber-exporting country that is aimed at addressing illegal logging as part of the FLEGT Action Plan. There are currently 15 countries, in Asia, Africa and Central and South America, that are involved in VPAs.
While Indonesia celebrates exporting over €1 billion worth of legal timber products to the EU in the first year of FLEGT licensing, the VPA is more than just a trade deal. During the process of negotiating and implementing the agreement, there have been dramatic changes in how the country’s forestry sector operates.
Since embarking on a VPA in 2007, Indonesia has increased transparency, reformed laws to address land rights, boosted enforcement and measures to tackle corruption, and created space for multi-stakeholder participation and independent forest monitoring by civil society. These have all helped to improve forest governance and combat illegal logging. According to Indonesian government data, there were only 16 cases of illegal logging between January and May this year, compared to a high of 1,705 cases in 2006.
Cracking down on illegal logging will help establish more sustainable livelihoods for the millions of people involved in the country’s forest sector – estimated at 50-60 million people in Indonesia. It will also boost government revenues, which can then be spent on healthcare, education or other social needs; revenues lost from illegal logging were estimated at around $1 billion a year between 2003 and 2014.
Room for improvement
There are still issues surrounding the involvement of small-scale forest enterprises in the FLEGT process and corruption continues to be a problem. However, with Indonesia under the spotlight as the first country to issue FLEGT licences, it is working to address these gaps. It is also assisting other VPA countries, like Ghana to finalize their FLEGT licencing system.
The VPAs provide a valuable model to enable the UK to expand legal and sustainable trade around the world, not just in the forest sector but beyond. The approach of strengthening governance and rule of law in producer countries is equally relevant in the agricultural, mining and manufacturing sectors of many developing countries, as a means to boost trade and establish sustainable livelihoods. As the VPAs have shown, through working with partner countries, the UK can support countries in strengthening their legal and institutional frameworks, enabling businesses and trade to flourish.
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