Yokohama, 3-4 December 2007

Paper for the International Seminar for Tackling Illegal Logging, 2007 II:

Public procurement policies for legal and sustainable timber inthe EU and recommendations for Japan*

Federico Lopez-Casero
Forest Conservation, Livelihoods and Rights Project
Institute for Global Environmental Strategies (IGES)* Extract from a research report: “Japan’s public procurement policy of legal andsustainable timber: Progress, challenges and ways forward” (Federico Lopez-Casero, Henry
Scheyvens eds. 2007), IGES

1. Contextual analysis of Japan’s timber procurement policy
Japan, the world’s third largest importer of wood, has laid out a range of measures toassist producer countries in combating illegal logging and to curb the resultant timber trade.
Of these, the development of a public timber procurement policy that favours legal andsustainable timber is the most significant and challenging step taken by the government.
The importance of public investment in Japan and the use of imported timber by publicagencies suggest that Japan’s public procurement policy is significant for the regional tradein timber. Public procurement policies are important not only because of the volumes oftimber involved, but also because they could spur the private sector to take action.
The new timber procurement policy has been introduced by revising the Basic Policy of
the Green Purchasing Law to include legality in the “criteria for decision” andsustainability in the “factors for consideration” for selected wood and wood products. Ineffect, the timber procurement policy gives greater weight to legality than sustainability;
the legality of the specified wood items must be considered in public procurement, whereas
sustainability need only be considered as desirable.
The Forestry Agency Guideline for Verification on Legality and Sustainability of Woodand Wood Products provides three modalities for verifying legality and sustainability:
forest certification and chain of custody systems; codes of conduct of wood industry
associations; self-established procedures of individual companies. Through the codes ofconduct approach, the government has passed a great deal of the responsibility of policy
implementation on to the private sector.
Progress by Japan’s private sector in establishing codes of conduct has been fairly rapid.
By 16 March 2007 all 19 national timber industry associations and 104 prefecture timberindustry associations had established codes of conduct for the purpose of supplying publiccontracts. Company accreditation has also progressed steadily.
2. Procurement policies in the EU and comparative analysis with Japan’s policy
A comparative analysis was conducted to deepen the understanding of Japan’s policy
by systematically contrasting its design and first steps of implementation with the policiesof the UK, France and the Netherlands and to explore options for strengthening the policy.
These three countries were selected because their longer history of timber procurement
policy development may provide direction to Japan’s evolving policy process in terms ofboth acknowledging shortfalls to avoid and promising approaches to follow. A broad
review of timber procurement policies in the UK, France and the Netherlands found that:* EU consumer countries have developed their policies independently, thoughharmonisation is now being discussed.
* Experience shows that procurement policy evolution can be gradual and incremental, or
it can be erratic. The evolution of policy can be marked by key events or turning points.
* Providing assurance of legality and sustainability of wood products is complex andcontested, which partly explains why policies evolve over a long period of time.

Table 1: Timber procurement policies in EU member states and Japan: Basic features
Country and Policy
product
enactment
coveragedate and(all product instruments
categories
unlessspecified)
Netherlands

UKFranceJapan

Binding on:
1. Central stateauthorities
2. Subnational
authorities

February 1997 1. Compulsory
2. Recommended
Directive(Since October2005 due implementation of
BRL guideline)
July 2000
1. Compulsory
2. RecomAdvice note & mended
guidelines (byCPET)
April 2005
1. Compulsory
2. RecomAdvice note & mended“notice ofinformation”
brochure
April 2006
1. Compulsory
2. Efforts toadhere areexpected
Guideline

Govt.
Verification of evidence for legality/ sustainability ofcriteria
procured timber based on:
to evaluate
Forest certification schemes
Alternative
schemes/modalities
evidence
Presently
Prior &Availability
Impartial
acceptregularmonitoring
schemes
assessment
3
All schemes 3
approved by (by Keurhout
Foundation;
Keurhout ;Future: BRL
In future:
Assessment
BRL & BRL
Board)
equivalentschemes
3
FSC, PEFC, 3
Evaluation of 3(by CPET) other(if concern)
SFI, CSA;MTCC (onlyevidence ofrecognised forlegality/legality)
sustainability
FSC, PEFC, 4 alternative 3
CSA, SFI,
modalities
MTCC, LEI,Keurhout, further schemes
listed by ITTO
FSC, SGEC, 2 alternative PEFC, SFI,
modalities
CSA, MTCC,LEI

Source: Lopez-Casero and Scheyvens 2007

*
*

*
*
*
*
*
*NGOs have been a major driver for the introduction of the policies and havesuccessfully lobbied governments.
The policy formation process is of keen interest to the private sector and NGOs.
Governments have sought their participation in policy development throughmulti-stakeholder processes.
All policies share a number of essential elements, such as instruments to verify
sustainability and/or legality and the informational needs of the procuring agents.
The elements of each policy are responsive to many variables, particularly the relative
influence of actors, their institutional relationships and the policy’s historical context.
Definitions of legality and sustainability in the policies vary widely from vague
descriptions to detailed sets of criteria and indicators.
An institutional framework must be constructed to implement the policy. Often, newinstitutions are established for this purpose.
Procurement policies usually distinguish between legality and sustainability and set thelatter as a higher objective.
All schemes accept forest certification for assurance of legality and sustainability andsome allow for other verification providing equivalence to the certification standards.
Some require forest certification schemes to be assessed against sets of process andperformance criteria.

*

Verification of legality is usually based on official documentation and self-declarations
throughout the supply chain.
* Policies differ widely with respect to whether the private or the public sector assesses
documentary evidence.
* Policies can be shaped by, as well as influence, the private sector.
The comparative analysis contrasted the design of four policies – Japan, UK, France, theNetherlands - with respect to requirements for verification of legality and sustainability andmeans for implementation. The comparative analysis suggested that there are a number ofelements that all procurement policies must contain to be effective. There are notablecommonalities and differences in the way in which the compared policies treat theseessential elements. Differences in treatment are justifiable because of the different contexts
in which the policies are located, but can also result in variations in policy effectiveness.
Table 2 provides an overview of the observations made in the report distinguishing whether
elements are missing (hyphen), reflected in a rudimentary fashion (hyphen in brackets),partially included (tick in brackets) or fully included (tick) in the respective policy designs.
Table 2: Essential elements of robustness in the compared policies’ designs
Elements of robustness
1. Major wood product categories
2. Generic definitions/criteria oflegality and sustainability
3. Provision of definitions/criteria toprocurement agents (or expert
bodies on their behalf) to assess
evidence of legality/sustainability
4. Assessment of legality andsustainability assurance schemes
using minimum criteria
5. Effective system for case-by-caseassurance of legal origin andcompliance, and chain of custody
6. Third party investigation ifconcern over legal origin andcompliance and chain of custody
7. Be mandatory to the extent
possible
8. Participation from all levels of
public administration encouraged
9. Freedom to pay a price premium10.Comprehensive guidance toprocurement agents
11. Internal monitoring of publicpurchases
12. Participatory & transparent
revision procedure

UK
33

Netherlands
3(3)FranceJapan3(-) (broad

3(-) (broad definitions,(to be revised)definitions,no criteria)

no criteria)

(-)

(-)

--

3

3

(criteria toagents)(criteria toexpert body)(3) (5schemesso far)(3)(procedure to
be revised)

(3)

(3)

(-) (private(-) (private sector to(to beevaluated)(UK system tobe adopted)

sector toestablish)

establish)

33(3)(in principle,not detailed)(3) (if “considerableevidence” forillegality)33(3)333(-)3(3)3 (support

3(3) (consider-(3)(-)

(3)
(-)

service)ing support)(information)(information)

(3)

(3)

(3/-)

3

(depends onamount)(legal requirement)

(3)

3

3

Source: Lopez-Casero and Scheyvens 2007

3

3. Essential elements of a robust timber procurement policy and recommendations forJapan•

Drawing on both the comparative analysis and the case study of forest realities in a highrisk country, we have elaborated on essential elements that a public timber procurement
policy should include to be robust. These are:
1. apply to major types of wood products from all regions
2. contain broad generic definitions/criteria of legality and sustainability
3. if the policy accepts existing legality and sustainability assurance schemes,a. define adequate criteria for assessing theseb. employ a third party to conduct the assessments and publicise resultsc. allow freedom to pay price premiums
4. if the policy has alternative modalities to existing assurance schemes, thesemodalities shouldd. for legality assurance, cover legal origin, legal compliance and chain ofcustodye. for sustainability assurance, include those criteria that are broadly
recognised by the international consensus reflected in sustainable forest
management criteria and indicators processes
f. included neutral assessment of documentary evidence
5. monitoring of suppliers and third party investigation when there is concern
over legal origin, legal compliance, chain of custody or sustainability
6. be mandatory to the extent possible
7. provide sufficient guidance for procuring agents to implement the policy
8. encourage participation from all levels of public administration, i.e., bothhorizontally (government agencies and (semi) public administrative bodies)and vertically (national and subnational)
9. include internal monitoring of procuring agents familiarity with and adherence
to the policy
10. include a participatory and transparent revision procedure for policy

Source: Lopez-Casero and Scheyvens 2007•

We have also formulated the following recommendations for Japan to strengthen its
public timber procurement policy:∗ create a broad generic legality standard to provide consistency in policy applicationin producer countries regarding the scope of legality definitions∗ use the generic legality standard as the basis for participating in processes to formulate national definitions/standards of legality∗ provide a definition/standard of sustainable forest management (SFM) in line with
the international consensus on SFM criteria∗ combine the recommended legality and sustainability standards with a chain ofcustody standard to establish a minimum set of criteria for the systematic andcomprehensive assessment of legality and sustainability assurance schemes∗ assess assurance schemes using these criteria and incorporate the findings in theindustry codes of conduct∗ ensure neutrality by having public procurement agencies assess the accuracy andveracity of documentary evidence provided by their suppliers∗ establish or employ a professional service to guide the implementation and strengthening of the policy, to handle grievance claims and to provide advisory support∗ Request the Council for Tackling Illegal Logging Issue to accommodate some of therecommendations from this study, particularly to a) develop minimum legality/sustainability standards, b) assess assurance schemes in a consistent, rigorous
manner, and c) advise on the documentation required for each country∗ specify comprehensive, systematic and transparent procedures to review documentary evidence when there is concern over its accuracy or veracity∗ collaborate with the EU to officially recognise the VPA licensing schemes, as one
step towards developing a global wood licensing system∗ make use of FLEGT achievements and consider collaborating in formulating a
global licensing scheme

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