Illegal Logging Update and Stakeholder Consultation

Illegal Logging Update and Stakeholder Consultation

Royal Institute of International Affairs, Chatham House, 10 St. James’ Square, London SW1.

Thursday 2nd – Friday 3rd December 2004

Chairs, Duncan Brack, Jade Saunders, Hugh Speechly, John Hudson.

Thursday, 2nd December 2004

International update

CITES COP 13 feedback – Sam Lawson, Environmental Investigation Agency (EIA)

The Thirteenth meeting of the Conference of the Parties (COP) to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) took place on the 2nd to 14th October 2004 in Bangkok, Thailand

Fifty proposals were considered on the level of international protection endangered species receive. Appendix I species are threatened with extinction and are, or may be, affected by trade. International trade for primarily commercial purposes is prohibited. Appendix II species may become threatened with extinction unless their trade is subject to strict regulation. Appendix III species are identified by an individual CITES Party as subject to domestic regulation and in need of international cooperation.

Four key tree species were identified:

· Asian yews have been overexploited for medicinal purposes in the Himalayas, Yunnan and Burma. The tree itself has been protected to some extent by an Appendix II listing, but chemical extracts have not been controlled, undermining the protective regime. China and the USA brought a proposal for extracts (but not finished pharmaceutical products) to be controlled, and for protection to be extended to other Asian yew species. Despite some opposition from Japan, both proposals adopted.

· Agar wood grows across South East Asia and is used for incense and perfumes. It has been illegally overexploited across the area. One species has been successfully listed on Appendix II and Indonesia requested the listing of other species and ‘parts and products’. Middle Eastern states who are the main importers of the finished products initially opposed the suggestion but it was passed.

· The illegal exploitation and international trade of Ramin has been well-documented. The trees grow in Indonesia and Malaysia and the timber and products are generally bought in developed countries. An Appendix III listing in 2001 has proved insufficient for protecting the species, particularly as Malaysia had a reservation which allowed dispensation for processed goods made of Ramin, creating a loophole through which illegally logged Indonesian trees could be ‘laundered’. At the meeting in October 2004, Indonesia requested an upgrade of the Ramin listing to Appendix II including a controversial annotation that it should include all parts and products. Despite concerns from Malaysia that its legitimate trade must not be penalised, both the proposal and annotation were accepted by consensus. This is the first time that an Appendix II listing has been made for parts and products of a commercial species and represents significant progress. The process was also considerably faster than similar efforts to list Mahogany, which is the only comparable situation.

· A Mahogany Working Group was established to explore the effectiveness of the current listing. It found that a number of states were not completing the necessary CITES non-detriment statements and issued a number of recommendations aimed at improving the protection for Mahogany species. The Secretariat supported the recommendations and it is hoped that they will be implemented by signatory states shortly.

Discussion

The question of a potential boycott of Ramin products was raised, and it was suggested that a precautionary approach is probably the safest given the recent level of Ramin laundering and the historical abuse of the CITES system.

Some participants suggested that CITES may represent a tool for protecting a much wider range of commercial species against illegal logging, but it was felt that such a move would undermine the original purpose of the treaty and would inevitably decrease the level of protection available for non-timber endangered species.

It was also announced that Indonesia and Malaysia have established a Ramin taskforce.

Commission for African Forestry Programme – Charlotte Middleton, UK Department for Environment, Food and Rural Affairs, on behalf of Mike Barrett, Commission for Africa Secretariat

Africa and Climate Change are the UK’s main priorities for the Presidencies of the G8 and EU in 2005. Both have significant links with international efforts to stem illegal logging and the trade in illegal timber and products. In order to better understand the complex problems facing Africa specifically, the Commission for Africa was set up by Tony Blair, in February 2004.

The Commission provides an opportunity for a fresh look at Africa’s past and present, and the international community’s role to date; from which to agree clear recommendations for the future. The Commission is made up of seventeen Commissioners with varied experience and specialist areas of knowledge, working in an independent capacity. Most of the Commissioners are from Africa but other Commissioners are from the UK, Canada, USA and France. The Commissioners are supported by the Commission for Africa secretariat, which is independent of the UK Government, but works closely with it as with other stakeholders in the UK and elsewhere.

The Commission will report in March 2005 on a range of conclusions and recommendations to be used to inform the UK Presidencies of the EU and G8.

The Commission covers a number of areas; the economy, governance, human development, peace and security, culture and participation and natural resources, which includes water, energy, conflict resources, transparency in natural resource governance, climate change and forestry. A consultation document was published in November 2004 outlining the key foci for each of these areas, and active consultation meetings have been held at Chatham House in London and across Africa.

Key forestry proposals in the Consultation document are:

· Give strong political endorsement to the Extractive Industries Transparency Initiative (EITI), to encourage its wider implementation and mobilise funding for building capacity to support this implementation;

· Promote application of transparency principles to other sectors.;

· Promote certification schemes in Africa to curb trade in illegal timber, plus action by the rest of the world to ensure that it does not import illegal timber;

· Promote further transparency of payments in financing by international financial institutions and export credit agencies, and encourage procurement policies across government more generally that promote transparency;

· Adopt a common definition of ‘conflict resources’ and promote action to control their trade.

Please see http://www.commissionforafrica.org for more information.

Interested parties are invited to submit their comments and views to the Secretariat. The contact point on forestry is Mike Barrett at

East Asia developments including FLEG, AFP and MoU actions – Hugh Speechly, DFID

The aim of the Indonesia-UK MoU is to reduce and eventually eliminate the trade in illegally logged timber between the two countries. A detailed description of the scope of both the principles and action under the MoU was given and progress to date noted.

In the policy arena, the most important development has been the publication of a draft definition of legality that has been established via a thorough stakeholder process. The draft definition is currently undergoing field trials in East Kalimantan. More details of the definition are available in the notes from the previous Chatham House stakeholder update meeting held in June 2004.

Recent consultation on the definition has made it clear that ‘stepwise’ approaches to legality have been strongly criticised by stakeholders concerned with social issues. There is a feeling that such an approach would allow difficult social issues to be ignored for the present, until later ‘steps’ are considered necessary.

It was concluded that the definition is not currently accepted by any sector, but its development has been an invaluable learning process and will continue.

In addition to the definition, a recent timber tracking project is underway and results are looking very positive. The work is being undertaken by SGS and URS, and funded by DFID and USAID, and at least one partner company is already discussing using the systems trialled to verify legality in its mainstream supply chains.

The Asia Forest Partnership was a WSSD initiative, which now covers a range of projects with illegal logging as its key focus. Four meetings have been held to date and a study on border controls has been undertaken. Efforts have been made to ensure harmonisation with other regional initiatives and engagement with work on defining legality and tracking. The AFP has no core funding but can recommend projects and is currently seeking funding from major donors.

East Asia FLEG Advisory Board update – Juge Gregg, EIA

In an attempt to revive political commitment to the East Asia FLEG process in the run up to the next Task Force meeting in early 2005, a FLEG Advisory Group has been established and has met with a wide range of participants.

The meeting included a summary of activities to date, review of process and a discussion of the role of advisory group in next steps.

Key proposals highlighted at the meeting were:

· To publicly urge EA FLEG countries to convene a well-prepared meeting in 1st half of 2005 in order to tackle the lack of coordination and continuity to date;

· That the Philippines should host /co-chair the 2005 meeting if Indonesia is willing;

· To promote restructuring of the process to share hosting burdens and involving civil society;

· To increase the push for data and radically improved transparency;

· To review and monitor Ministerial commitments and demonstrable progress.

Feedback from Trans-boundary Enforcement Cooperation meeting, Bangkok – Juge Gregg, EIA

A range enforcement officials and civil society participants were involved in the meeting, which covered many relevant enforcement models. Individual country experiences were covered in detail, particularly the Philippines, Indonesia, Malaysia, Papua New Guinea and Viet Nam.

Key proposals highlighted by the group were:

· That the potential for a regional MoU or multilateral agreement on enforcement/information sharing should be established;

· That a regional network of enforcement officials, responsible traders and civil society should be established;

· That the experiences of emerging bilateral initiatives such as PIAIL, FLEGT and the bilateral MoUs should be explored.

Both meetings resulted in constructive dialogue and the recognition of success of FLEG-inspired efforts but concluded that there was a vital need for coordination, coherence and monitoring, and renewed efforts in the fields of transparency, capacity building and substantially strengthened political will, to tackle problems. Please see www.inece.org/illegaltimber/ for individual presentations and more information.

Forest Law Enforcement Experience in Sarawak – Sani Bakar, General Manager, Sarawak Forestry Corporation

Following ITTO recommendations, management of Sarawak’s forests has recently been outsourced to the private sector. The group that has taken on responsibility for the forests is the Sarawak Forestry Corporation, which has been given the same powers as police to investigate and enforce forest law and has undertaken ISO 9000 and 14001 certification.

The main aim of the Corporation has been to develop policies which avoid the potential for collaboration and collusion with criminals. Significant efforts have also been made to ensure cross-agency cooperation with relevant government departments. The approach taken is one of security and asset protection rather than reactive law enforcement and the group’s main objective is to make it as hard as possible to break forest law or log in protected areas.

The main change is the level of responsibility that has been given to forest managers and concession owners. It is now necessary to develop a security plan for all trees before legal levels of logging are allowed, and illegal levels of cut will be subject to censure and may result in concession rights being removed.

Phase one of a timber monitoring scheme has also been established to implant microchips on every log that has been harvested legally. Data on the movement of each log is collected online and transparently available to buyers. Phase two will eventually see the project expanded to cover processed products by reconciling source data with factory outputs based on recovery rate and expected wastage in any given process. Transparent cross-checking is seen as a vital element in any credible system.

In addition to tackling illegal sources of timber, one of the main trade problems that is currently under consideration by the Corporation is the under-declaration of value. This is often the result of flaws in the ‘Bill of Lading’ system by which exports are assessed and administered.

For more information please see: www.sarawakforestry.com

Discussion

Tracking

Technical clarifications relating to experience of tracking technology in Sarawak requested. Costs were estimated to be around US$800 per site; with producers responsible for minimal microchip costs and all other covered by the Corporation. Satellite costs are around US$20,000 per year. It was felt that the technology was currently available to track through pulp mills and WWF Indonesia have been exploring the possibility of pilot projects to demonstrate this in Riau. The vast experience of tracking in the Scandinavian and North American private sector was noted and it was proposed that sharing of lessons and best practice with these sectors would be useful. The use of such technological solutions to undermine endemic and apparently intractable corruption in some key government agencies in timber-producing countries was felt to have significant potential.

Political Processes

Key concerns with the lack of progress or political will in relevant Asian political process were expressed. What some regarded as an inevitable multilateral pace, others felt was evidence of fundamental complacency. UK Government representatives were keen to stress efforts that have been made to stimulate action and expressed a hope that the newly formed Advisory Group may encourage developments.

The effects of recent political changes in Indonesia were discussed and it was felt that the signs were promising, particularly relating to a commitment to tackle corruption, although more time would be needed to demonstrate clear evidence of improvements.

Legal definitions

The Indonesian draft definition of legality was discussed in some detail. It was felt that although the consensual approach taken was politically useful, it would be unlikely to be acceptable to a legal court. A test case was suggested. However, defenders of the process argued that it was designed to facilitate trade rather than enforcement and as such, it was not necessary for it to be tested in Indonesian courts, but instead to be acceptable to European markets and NGOs.

Africa FLEG follow-up – Julia Falconer, DFID

To date, the Steering Group has been keen to see follow-up action taking place through existing regional organisations such as NEPAD and COMIFAC, and as a result, no secretariat or taskforce has been established; however there has been interest in a potential second Ministerial meeting at some point in 2005 or 2006. Work is currently underway to attempt to engage organisations that were not involved in the first meeting and critical funding for continued World Bank facilitation has been supplied by the EU.