Communication from the Commission to the Council and the European Parliament - Forest Law Enforcement, Governance and Trade (FLEGT) - Proposal for an EU Action Plan
Date: 2003-05-21
Institutions: European Commission
Subjects: action programme, forestry economics, forestry holding, forestry legislation, fraud, governance, international cooperation, sustainable development, trading operation

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 21.5.2003
COM (2003) 251 final

COMMUNICATION FROM THE COMMISSION
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT

FOREST LAW ENFORCEMENT, GOVERNANCE AND TRADE
(FLEGT)

PROPOSAL FOR AN EU ACTION PLAN

TABLE OF CONTENTS

1.

2.

3.

4.

4.1.

4.2.

4.3.

4.4.

4.5.

4.6.

4.7.

5.

6.

EXECUTIVE SUMMARY.......................................................................................... 3

INTRODUCTION ....................................................................................................... 4

THE ORIGINS AND SCOPE OF THE ACTION PLAN ........................................... 5

THE EU ACTION PLAN FOR FOREST LAW ENFORCEMENT,
GOVERNANCE AND TRADE (FLEGT) .................................................................. 6

Support to timber-producing countries ........................................................................ 6

Trade in timber............................................................................................................. 9

Public procurement .................................................................................................... 15

Private sector initiatives ............................................................................................. 16

Financing and investment .......................................................................................... 18

Supporting the Action Plan with existing legislative instruments ............................. 19

Conflict timber ........................................................................................................... 21

CO-ORDINATION AND PROGRAMMING........................................................... 21

THE NEXT STEPS.................................................................................................... 23

ANNEXES ............................................................................................................................... 24

2

1. 

EXECUTIVE SUMMARY

This  document,  the  EU  Action  Plan  for  Forest  Law  Enforcement,  Governance  and  Trade
(FLEGT),  sets  out  a  process  and  a  package  of  measures  through  which  the  European
Commission  proposes  to  address  the  growing  problem  of  illegal  logging  and  related  trade.
Addressing this issue is one of the European Commission’s priorities in the follow-up to the
2002 World Summit on Sustainable Development (WSSD).

The  Action  Plan  is  the  start  of  a  process  which  places  particular  emphasis  on  governance
reforms  and  capacity  building,  supported  by  actions  aimed  at  developing  multilateral  co-
operation and complementary demand-side measures designed to reduce the consumption of
illegally  harvested  timber1  in  the  EU  (and  ultimately  major  consumer  markets  elsewhere  in
the world).

Development  co-operation:  Efforts  will  be  focused  on  promoting  equitable  and  just
solutions to the illegal logging problem which do not have an adverse impact on poor people;
helping  partner  countries  to  build  systems  to  verify  timber  has  been  harvested  legally;
promoting  transparency  of  information;  capacity  building  for  partner  country  governments
and civil society; and promoting policy reform.

Trade  in  timber:  The  EU  will  initiate  a  longer-term  process  of  dialogue  with  wood-
producing  and  wood-consuming  countries  to  extend  international  collaboration  to  tackle
illegal logging and to develop a multilateral framework on which actions could be based. In
the  immediate  term,  a  voluntary  licensing  scheme  is  proposed,  whereby  partner  countries
issue  a  permit  attesting  to  the  legality  of  timber  exported  to  the  EU.  This  will  require  a
Council  Regulation  for  implementation.  The  Commission  will  review  options  for,  and  the
impact of, further measures, including, in the absence of multilateral progress, the feasibility
of legislation to control the imports of illegally produced timber into the EU.

Public procurement: Practical information will be provided to guide contracting authorities
on how to deal with legality when specifying timber in procurement procedures.

Private sector initiatives: Measures are proposed to encourage private sector initiatives  for
good practice in the forest sector, including the use of voluntary codes of conduct to source
only legal timber.

Financing and investment safeguards: Banks and financial institutions which invest in the
forest sector should be encouraged to develop due diligence procedures which take account of
the  environmental  and  social  impact  of  forest  sector  lending;  including  conformity  with
relevant  legislation.  Export  Credit  Agencies  should  be  encouraged  to  develop  guidance  on
improved project screening procedures and codes of practice for forest sector projects.

Implementation:  To  support  implementation  of  the  above  activities,  a  co-ordinated  EU
response  is  proposed,  drawing  on  the  different  strengths  and  capacities  of  the  Commission
and  EU  Member  states.  A  joint  work  programme  will  be  prepared  with  Member  States  to
facilitate this.

1

Throughout the document the term ‘timber’ is  used to refer to roundwood and rough sawnwood. The
term ‘timber products’ implies additional further processing.

3

                                                
2. 

INTRODUCTION

Illegal  logging  takes  place  when  timber  is  harvested  in  violation  of  national  laws.  The
clandestine nature of illegal logging makes its scale and value difficult to estimate in relation
to the global trade in forest products  (estimated by the  OECD to be worth over  €150bn per
year2), but strong evidence suggests that it is a substantial and growing problem. The World
Bank’s 1999 review of its global forest policy observed: “In many countries, illegal logging is
similar  in  size  to  legal  production.  In  others,  it  exceeds  legal  logging  by  a  substantial
margin.”3

The  illegal  exploitation  of  natural  resources,  including  forests,  is  closely  associated  with
corruption  and  organised  crime.  In  some  forest-rich  countries,  the  corruption  fuelled  by
profits from illegal logging has grown to such an extent that it is undermining the rule of law,
principles of democratic governance and respect for human rights.

In some cases the illegal exploitation of forests is also associated with violent conflict. Profits
from the illegal exploitation of forests (and of other natural resources) are often used to fund
and prolong these conflicts.

Illegal  logging  and  associated  trade  undermines  the  competitiveness  of  legitimate  forest
industry  operations  in  both  exporting  and  importing  countries.  In  so  doing,  this  limits  the
ability of these industries to conduct operations that foster sustainable forest management, and
sustainable development generally.

Illegal logging costs governments vast sums of money. Estimates suggest that illegal logging
costs  timber-producing  countries  €10-15  billion  per  year  in  lost  revenues,4  which  could
otherwise be spent on the provision of better healthcare, education and other public services,
as well as the implementation of sustainable forest management.

Illegal  logging  also  causes  enormous  environmental  damage  and  loss  of  biodiversity,  for
instance  through  logging  of  national  parks,  and  can  facilitate  the  illegal  exploitation  of
wildlife. It can be a contributory factor to the process of deforestation, and it can increase the
vulnerability  of  forests  to  fires  –  both  of  which  have  climate  change  implications.  It
undermines  sustainable  forest  management  and  has  a  long  term  negative  impact  on  the
livelihoods of forest-dependent people, many of whom are amongst the world’s poorest and
most marginalised people.

Illegal logging thus undermines many essential elements of the EC’s development objectives:
public  sector  financing  for  development  targeted  at  the  poor,  peace,  security,  good
governance, the fight against corruption, and sustainable environmental management.

Although  the  supply-side  of  the  problem  lies  in  timber-producing  countries,  strong
international demand for timber can be exploited by unscrupulous operators and traders, with
the  effect  of  encouraging  illegal  logging  operations.  As  a  major  source  of  this  demand,
important measures can be taken by the EU and other major consumers of timber products to
direct demand towards only legally harvested timber.

2

3

4

OECD Environmental Outlook (2001)
World Bank, Forest Sector Review (1999)
World Bank Revised Forest Strategy (2002)

4

                                                
3. 

THE ORIGINS AND SCOPE OF THE ACTION PLAN

This Communication proposes an Action Plan through which the European Union intends to
support efforts to tackle the problem of illegal logging. The Commission began work on this
following a Ministerial Conference in Indonesia in September 2001, and held an international
workshop  in  Brussels  in  April  2002  to  which  experts  from  the  main  wood-producing  and
importing countries, forest-based industries, civil society and other stakeholders were invited
as  part  of  the  process  of  developing  this  Action  Plan.  The  Plan  also  builds  on  the
commitments  made  in  the  Communication  on  a  Global  Partnership  for  Sustainable
Development5  and  in  the  6th  Community  Environmental  Action  Plan.6  The  Action  Plan
represents  a  contribution  to  the  implementation  of  the  WSSD  Plan  of  Implementation,
specifically paragraph 45c.7

A description of EU involvement in national and  international efforts  to improve  forest law
enforcement  and  governance  around  the  world  is  presented  in  Annex  1.  Notable  amongst
international efforts are a series of regional initiatives addressing forest law enforcement and
governance.  The  first  such  regional  initiative  was  the  Asia  Forest  Law  Enforcement  and
Governance process. This has made considerable progress in raising political commitment to
address  illegal  logging,  and  in  bringing  together  the  governments  of  timber-producing  and
consuming countries, local and international civil society, the private sector, and donors, in a
co-ordinated  programme  of  work.  A  similar  process  is  now  being  initiated  in  Africa,  with
possible replication in other regions. The European Commission and a number of EU Member
States  have  provided  strong  support  to  the  processes  in  Asia  and  Africa  –  both  through
political support and financial contributions.

These regional initiatives in Africa and Asia focus only on the question of legality, and do not
address  wider  and  more  complex  questions  concerning  the  sustainability  of  forest
exploitation. There is a distinct difference between the two: legal timber can be harvested in
an  unsustainable  manner,  for  example  through  authorised  land  clearance;  and  illegal  timber
can  come  from  sustainable  sources,  for  example,  timber  harvested  under  indigenous
management systems which are sustainable but don’t comply with formal legal requirements.

This Action Plan adopts the same approach taken in the Africa and Asia regional processes,
and  deals  only  with  the  question  of  legality,  but  it  should  be  noted  that  the  EU’s  wider
objective  is  to  encourage  sustainable  forest  management.  Since  in  many  countries  forest
legislation is based on the premise of sustainable forest management, better law enforcement
will in general lead to more sustainable forest management. Where this is not the case the EU
should encourage  a  review  of  the  legal  framework.  Better  forest  governance  is  therefore  an
important step on the path to sustainable development

The Action Plan  should thus be placed in the  context of  the overall  efforts of the European
Community  to  achieve  sustainable  forest  management,  both  within  and  outside  the  EU.
European Community efforts in this regard include substantial tropical forest development co-
operation programmes in Brazil, Central Africa and Indonesia.

5

6

7

COM(2002) 82, 13.2.2002
Decision No 1600/2002/EC of the European Parliament and the Council, 22 July 2002
Paragraph  45c  states:  Take  immediate  action  on  domestic  forest  law  enforcement  and  illegal
international  trade  in  forest  products,  including  in  forest  biological  resources,  with  the  support  of  the
international  community,  and  provide  human  and  institutional  capacity-building  related  to  the
enforcement of national legislation in those areas.

5

                                                
4. 

THE  EU  ACTION  PLAN  FOR  FOREST  LAW  ENFORCEMENT,
GOVERNANCE AND TRADE (FLEGT)

The  Action  Plan  consists  of  support  for  timber-producing  countries,  efforts  to  develop
multilateral  collaboration  to  combat  the  trade  in  illegally  harvested  timber,  voluntary
measures to support governments wanting to ensure that illegally harvested timber from their
territory  is  not  admitted  to  the  EU  market,  public  procurement  policy,  private  sector
initiatives,  measures  to  avoid  investment  in  activities  which  encourage  illegal  logging,  and
conflict  timber.  In  addition  reference  is  made  to  existing  legislation  at  Community  and
Member State level which could be applied to address the issue.

4.1. 

Support to timber-producing countries

The highest levels of illegal logging are found in developing and emerging market countries,
and development co-operation has an important role to play in building capacity to tackle the
illegal logging problem.

4.1.1.  Equitable and just solutions

Illegal  logging  can  range  in  scale  from  large  industrial  operations  working  openly  and
illegally  in  national  parks,  through  to  impoverished  smallholder  farmers  clearing  land  for
agriculture or cutting timber for housing without possessing the necessary licences.

The  challenge is to ensure  that actions to  address  illegal  logging,  particularly  enhanced  law
enforcement,  do  not  target  weak  groups,  such  as  the  rural  poor,  while  leaving  powerful
players  unscathed.  This  requires  careful  consideration  in  countries  where  corrupt  elements
within the police and judicial services operate in complicity with large scale illegal business
activities.

Existing  forest  laws  and  policies  frequently  promote  large  scale  forest  operations  and  may
exclude  local  people  from  access  to  forest  resources.  This  inequity  breeds  resentment  and
conflict. It also forces local people who depend on forest resources to operate illegally, since
they often have no choice in the way they meet their basic livelihood needs. However, given
the  correct  incentives,  forest-dependent  communities  can  become  key  allies  in  the  drive  to
reduce  illegal  logging.  Many  examples  of  this  have  evolved  in  situ  –  sometimes  with  and
sometimes  without  donor  help.  For  example,  in  West  Kalimantan,  Indonesia,  a  forest
protection  scheme  launched  by  the  village  of  Pendaun  has  been  replicated  by  neighbouring
settlements,  effectively  excluding  illegal  loggers  from  a  large  area  of  hitherto  unprotected
forest.8 In Brazil, the Mamiraua Sustainable Development Reserve is one of several examples
of  structures  for  participation  of  civil  society  in  the  management  and  protection  of  forests.
Similar examples exist elsewhere in the world.

Donors, including the EU and Member States, can give greater weight to these initiatives by
providing  support  to  community-based  forest  management,  by  helping  to  propagate  lessons
from these schemes in national laws and policies, and by working with partner governments
to  ensure  that  key  underlying  factors,  such  as  land  tenure  and  access  to  forest  resources,
encourage local participation in the fight against illegal logging.

8

Case study presented at the Asia Ministerial Conference for Forest Law Enforcement and Governance.
11-13 September 2001, Bali, Indonesia.

6

                                                
4.1.2.  Verification systems

In countries with weak forest law enforcement, reliable systems which can distinguish legal
from illegal production will be essential in order to provide credible guarantees to the market
that  timber  has  been  legally  harvested.  Such  systems  would  form  the  basis  for  the
identification  of  legally  harvested  timber  for  export  to  the  EU  market  under  proposed
Partnership  Agreements  (Section  4.2).  The  setting  up  of  such  systems  is  likely  to  require
technical  development  and  additional  capacity  building  and  institutional  strengthening  in
government institutions, civil society and the private sector.

Amongst  the  measures  which  can  be  applied,  a  range  of  technologies  can  help  to  monitor
harvesting operations and track timber from point of harvest, through processing mills, ports
and  on  to  final  markets.  Development  of  such  monitoring  and  tracking  systems  will  be
supported by future EC forest development co-operation.

4.1.3.  Transparency

Donors  can  help  to  encourage  greater  transparency  of  information  within  the  forest  sector.
Important  aspects  of  transparency  include  the  availability  of  accurate  information  on  forest
concession location and ownership, forest condition, and the provision of information on laws
and regulations translated into languages understood by the general public.

Transparency  is  also  helped  by  the  involvement  of  independent  monitoring  and  auditing  of
systems to verify the legality of timber in producing countries. Independent monitoring makes
verification systems more credible and less prone to corruption. There are many examples of
where  independent  monitoring  has  been  used  to  good  effect  in  the  forest  sector,  at  the
instigation  of  the  relevant  national  authorities.  Accountants,  auditors,  consultants  and  non-
governmental organisations have all played an important role in this ground-breaking work to
promote transparency.

Technologies  such  as  remote sensing  and  aerial photography  also have an  important  role  to
play in ensuring transparency. The Joint Research Centre of the European Commission (JRC)
has  a  long-standing  expertise  in  the  application  of  remote  sensing  technologies  to  forest
mapping  and  monitoring  and  the  management  of  information,  and  will  be  able  to  offer
relevant expertise to support the evolving FLEGT programme.

4.1.4.  Capacity building

Partner  governments  need  donor  support  to  implement  broad  governance  reforms,  for
example  in  the  judiciary,  the  police  and  the  military.  In  many  countries  corruption  and  the
lack of accountability in these institutions does much to encourage illegal and unsustainable
exploitation of natural resources, including forests.

Direct help is also needed to build capacity to deal with  the  new and  complex set  of  issues
which government agencies in developing countries must deal with: monitoring and gathering
evidence  of  environmental  crime;  building  legal  cases  against  those  who  transgress;  raising
awareness  of  environmental  law  within  the  police,  the  legal  profession,  public  prosecution
services and the courts; training of customs officials; and awareness raising to help build the
public  and  political  support  needed  to  tackle  the  entrenched  corruption  which  often  lies
beneath illegal logging. Capacity building can also be directed to support revenue collection
in the forest sector, since it is through enhanced revenues that partner countries stand to gain

7

most  from  reducing  illegal  logging.  Capacity  building  should  not  be  limited  to  the  public
sector, but must also include civil society and the private sector.

4.1.5.  Policy reform

Forest laws and policies prepared in past political eras (such as under colonial administrations
or ousted dictatorships) may be outdated and over-emphasise a top-down  approach which is
neither  equitable  nor  effective,  especially  in  remote  areas  with  little  government  presence.
Laws  may  also  be  so  complex  that  complying  with  all  the  requirements  becomes  a
disproportionate  burden,  thus  inadvertently  creating  incentives  which  encourage  illegal
activities.  In  other  cases  laws  may  be  contradictory,  especially  where  such  legislation
emanates from different sectors.

There is frequently a need for policy reform and simplification of procedures. National forest
programme  (nfp)  processes  provide  a  framework  through  which  all  stakeholders  –
governments, industry and civil society – can work towards this type of reform in the forest
sector. The EC is supporting nfp processes in various countries.

Box 1: Indonesia as a pilot example of a forests and governance support programme

The case  of  Indonesia  provides  a  pilot  example  of  how  development  co-operation  to  support  the  Action
Plan will work in practice.

The Indonesian government has identified stopping illegal logging as a high policy priority, and has taken
some ground-breaking steps towards addressing the problem. Fighting illegal logging and corruption form
an important  focus  in  the  political  dialogue  between  the  Indonesian  government  and  the  EU  (and  other)
donors,  who  meet  together  in  the  forum  of  the  Consultative  Group  on  Indonesia  (CGI).  Indonesian
ministers  and  European  Commissioners  have  also  on  a  number  of  occasions  met  to  discuss  closer
collaboration to tackle illegal logging.

This policy priority is reflected strongly in EU development co-operation with Indonesia, including in the
EC  Country  Strategy  for  the  country,  which  prioritises  the  management  of  natural  resources  and  good
governance.

A process to identify a forests and governance support programme is now under way. The lessons learned
both  from  the  dialogue  with  the  Indonesian  government,  and  the  experience  with  preparing  the  support
programme will offer valuable lessons for other countries participating in the FLEGT programme.

Engagement in policy dialogue between donors and partner governments can also do much to
promote  the  necessary  reform.  This  is  a  very  important  area  of  work,  since  it  is  becoming
clear  that  initiatives  to  promote  good  governance  for  the  management  of  natural  resources
will fail  in  countries  where  the  broader  policy  environment  is  not  favourable  to  reform  and
change. Policy dialogue to promote forest sector reform has had some success in Cambodia,
Indonesia  and  Cameroon  (among  others).  In  the  latter,  forest  sector  reform  became  a
condition  of  future  financial  assistance  from  the  IMF  after  a  study  highlighted  the  large
revenue losses due to illegal logging.

To implement development co-operation actions for 4.1.1 to 4.1.5, the Commission will:

(cid:1)  work  to  integrate  further  support  for  FLEGT  issues  into  future  programming  of  EC
Thematic, Country and Regional development co-operation, into EC Country and Regional

8

Strategy  Papers,  and  into  national  Poverty  Reduction  Strategies  (PRSPs),  in  countries
where this is a national priority, and in particular in FLEGT Partner countries.

(cid:1)  use  the  funds  available  under  the  Tropical  Forest  Budget  Line  (B7-6200).  Combating
illegal logging is identified as a priority issue in the 2002/2003 strategic guidelines for the
Tropical Forest Budget Line;9 and;

(cid:1)  use resources already earmarked for FLEGT-related activities under existing Regional and

Country Programmes (box 1).

4.2. 

Trade in timber

Illegal logging is largely concentrated in developing and emerging market countries, but the
international demand for timber provides a substantial market, within which there is scope for
unscrupulous  operators  to  procure  and  trade  in  illegally  harvested  timber.  The  OECD
estimates  that  the  global  trade  in  timber  is  worth  over  €150bn  a  year.10  There  is  strong
evidence – as summarised in the 1999 World Bank Forest Sector Review and demonstrated in
a growing number of country-based studies – to show that a significant share of this trade is
likely to be based on illegally harvested timber.

In the light of wood product trade patterns presented below and in Annex 2, and because of
the  nature  of  the  problem  of  illegal  logging,  a  multilateral  framework  gathering  main
importers and exporters would be the most effective way of tackling the issue.

However, given the complexity of building such a multilateral framework and considering the
urgency of helping exporting countries to better control the legal origin of their exports, the
EU, in addition to pursuing multilateral co-operation, aims to immediately conclude bilateral
or  regional  FLEGT  partnership  agreements,  which  are  described  further  below.  These
complementary  measures  can  play  an  important  role  in  restricting  the  entry  of  illegally
harvested timber into the EU.

4.2.1.  EU import patterns in timber products

This section provides an outline of the size and nature of flows of forest products into the EU
in order to provide the context for trade-related elements of the Action Plan. The greater part
of  the  trade  in  timber  and  timber  products  occurs  between  developed  countries  and  is  not
unduly affected by illegal logging  activities.  For  example, the  EU  has an  important  trade in
temperate  hardwood  logs,  veneers  and  sawnwood  from  North  America.  This  trade  involves
lower volumes of timber than, for example, the trade with Russia, but has a higher value due
to the type of product.

Intra-EU  trade  is  also  very  important,  accounting  for  around  80%  of  the  total  EU  trade  in
timber.  Nevertheless,  the  EU  is  an  important  market  for  both  legal  and  illegally  harvested
timber entering international trade. Other important markets for internationally traded timber
are Japan, China and the United States.

9

10

Throughout this document the term Tropical Forest Budget Line refers to funds made available under
budget line B7-6200 (now 21 02 05) on the basis of  Regulation (EC) No 2494/2000 of the European
Parliament  and  of  the  Council  of  7th  November  2000  on  measures  to  promote  the  conservation  and
sustainable management of tropical forest and other forests in developing countries.
OECD Environmental Outlook (Paris, 2001, page 122).

9

                                                
There are four key regions and countries within the scope of this Action Plan, which together
contain  nearly  60%  of  the  world’s  forest  and  supply  a  large  proportion  of  internationally
traded  timber  –  Central  Africa,  Russia,  Tropical  South  America  and  Southeast  Asia.  Each
region is characterised by specific trade patterns. Volumes of timber that are imported from
Africa  by  the  EU  remain  limited  (less  than  4%  in  value  of  world  trade  flows  in  wood
products) but constitute an important trade for the region. In certain countries, most notably in
Central Africa, exports of timber to the EU account for over 20% of their total trade with the
EU.11 The EU is an important market for timber from Russia – in particular from Northwest
Russia – which is the largest supplier of roundwood to the EU. Exports to the EU from Russia
are important in both absolute and relative terms.

EU imports from Asia and Latin America are less important. In the case of Asia which is the
most important importer and exporter of tropical wood, the EU counts for only a minor part of
exports. Summary trade data is presented in Annex 2. Unlike Russia and Africa, which export
mainly roundwood or sawnwood, Asia and South America mainly trade in processed timber
products  with  higher  added  value,  such  as  mouldings,  furniture  and  paper.  The  longer  and
more  complex  supply  chain  for  these  products  raises  some  difficulties  with  respect  to
verifying legality of the raw materials. Firstly, such products are often made with wood from
more  than  one  source.  Secondly,  processing  often  takes  place  in  an  intermediary  country
before export to the final marketplace. This is particularly the  case in Asia, where  there  are
very  strong  indications  that  large  volumes  of  wood  are  harvested  illegally  in  Indonesia,
Burma,  and  Cambodia  and  shipped  to  large  manufacturing  centres  in  other  countries  of  the
region.  These  products  are  then  processed  and  sold  onto  major  consumer  markets,  such  as
Europe,  often  at  very  competitive  prices  and  frequently  at  prices  which  undermine
legitimately produced goods.

Tracking products made of wood harvested in one country and processed in another is more
complex  than  tracking  primary  and  rough-processed  products  manufactured  in  the  country
where the raw material was harvested. According to the non-preferential rules of origin in the
Community  applying to timber, as  set  out  in  the  EC  Customs  Code,12  goods  are  deemed  to
originate  in  the  country  where  they  underwent  their  last,  substantial,  economically  justified
processing.

Given the place of the EU in the world market of wood products, important but not dominant,
any measure targeting trade flows will be more efficient if extended to include collaboration
with  other  importers  (i.e.  in  a  multilateral  framework).  When  designing  trade  measures,
attention  has  also  to  be  paid  to  the  specificity  of  each  region  and  of  the  potential  to  divert
trade flows to regions where demand is on the rise, such as Asia.

4.2.2.  Developing the multilateral framework and international collaboration

An important element of the trade-related measures set out in this part of the Action Plan is to
engage other major timber consumers and explore ways of working together towards a more
comprehensive framework to restrict the volumes of illegally harvested timber entering their
markets. This part of the Action Plan will build on a need for such collaboration highlighted
by the G8.

11

12

DG Trade: http://europa.eu.int/comm/trade/bilateral/acp/acp.htm
Council Regulation (EEC) No 2913/92, OJ L 302, 19.10.1992, p.1-50 as last amended

10

                                                
Some  initial  exchanges  of  views  amongst  major  consumer  blocks  have  taken  place.  At  the
EU-Japan Summit in Tokyo on 8 July 2002, it was agreed to continue exchanging views and
collaborating in order to combat illegal logging and the use of illegally harvested timber and
related products as a priority under the EU-Japan Action Plan.13 At a high-level EU-US Task
Force  meeting  held  in  Copenhagen,  Denmark,  on  15  July  2002,  the  US  and  EU  delegates
expressed great interest in working together on this issue.

The EU, the United States and Japan were all present at a side event on illegal logging hosted
by the European Commission at the World Summit on Sustainable Development (WSSD) in
Johannesburg,  in  August  2002.  At  the  side  event,  which  also  included  producer  country
governments,  representatives  of  the  private  sector  and  non-government  organisations,  all
parties expressed agreement on the need to work together to tackle illegal logging.

Co-operation between the EU, the US and Japan in this matter would account for a large part
of  the  world  market  for  timber  and  timber  products.  Efforts  must  also  be  made  to  engage
other  major  wood-consuming  nations,  particularly  China,  in  the  expansion  of  the  global
FLEGT initiative.

Once  a  caucus  of  the  main  wood-producing  and  importing  countries  are  working  closely
together to combat illegal logging and the associated trade, it may become appropriate to look
at  ways  of  transforming  this  step-by-step  approach  into  a  global  process,  whether  by
multilateral agreement or by a series of linked regional agreements.

To  develop  the  multilateral  framework  and  international  collaboration,  the  Commission
will:

(cid:1)  continue to build on contacts made with Japan and the US, widen this dialogue to include
other  major  markets  for  timber  and  key  timber-producing  countries,  and  seek  to  build
consensus  amongst  importing  and  exporting  countries  on  the  best  way  to  tackle  the
problem;

(cid:1)  explore  possibilities  for  collaboration  on  the  issue  with  countries  in  the  European  Free

Trade Area (EFTA);

(cid:1)  engage in dialogue, based on the ideas presented in the Action Plan, with other countries in
appropriate  international  meetings,  such  as  the  UN  Forum  on  Forests,  International
Tropical  Timber  Organisation,  the  regional  FLEG  processes,  the  Asia  Forest  Partnership
and the Congo Basin Forest Partnership; and

(cid:1)  gather lessons from international efforts in other sectors, such as the Kimberley Process, an
international  initiative  to  restrict  trade  in  conflict  diamonds  with  a  view  to  building
effective conditions and a framework for multilateral actions.

These  actions  will  be  taken  in  close  collaboration  with  other  importing  and  exporting
countries which share the EU’s concerns about illegal logging.

4.2.3.  Voluntary licensing of exports

Countries attempting to tackle illegal logging can find their efforts frustrated by the fact that
once  illegally  harvested  timber  is  shipped  abroad  there  is  no  simple  means  to  prevent  it

13

See http://europa.eu.int/comm/external_relations/w28/1.htm, Annex 2, objective 3, final point

11

                                                
entering  the  supply  chain  and  providing  profits  for  those  involved.  Similarly,  importers
purchasing  timber  from  countries  alleged  to  have  problems  of  illegal  logging  often  are  not
able to ensure that they only purchase legally harvested timber, unless they operate a chain of
custody system  going  back  to  the  forest  or purchase  certified  timber.  The  Commission  thus
proposes to launch a voluntary licensing scheme to ensure that only legal timber is imported
from countries participating in the scheme.

Under this scheme, exports of timber from participating countries (FLEGT Partner Countries)
to the EU would be accompanied by an export permit, which would be granted if the timber
has  been  harvested  in  conformity  with  relevant  national  legislation.  Timber  originating  in  a
FLEGT Partner Country and arriving at an EU point of import would not be released for free
circulation in the EU without such a permit.

In  order  for  the  scheme  to  function  properly,  FLEGT  Partner  Countries  would  need  to
establish reliable and credible systems and structures to identify and certify timber harvested
in conformity with national legislation and monitor its flow to the EU and elsewhere. Initially,
a phasing-in period may be required.

The  FLEGT  partnership  agreements  would  initially  cover  a  limited  range  of  solid  wood
products (roundwood and rough sawnwood) due to the difficulties of ascertaining the origin
of  processed  timber  products,  but  provision  could  be  made  to  extend  the  scheme  to  other
product  categories,  where  practicable.  This  could  involve  development  of  a  means  of
verifying  that  timber  imports  from  third  countries,  which  were  then  subject  to  further
processing and exported to the EU, were harvested in conformity with national legislation in
the  country  where  the  wood  was  logged.  Such  an  approach  would  be  facilitated  if  regional
rather than national FLEGT partnership agreements were developed.

The main advantages for participating countries would be:

(cid:1)  increased market confidence for timber from participating countries;

(cid:1)  increased revenues from taxes and duties – indications are that these will more than cover
the expenses associated with running a system to verify legality of harvesting and tracking;

(cid:1)  additional  enforcement  tools  to  combat  illegal  activities  in  the  market  of  origin  of  the

wood;

(cid:1)  once  established,  the  mechanisms  could  be  upgraded  to  support  the  tracking  and

verification of certified timber from sustainably managed forests; and

(cid:1)  priority for EC development assistance for FLEGT-related support measures, to be decided

in the context of programming of the relevant country strategies.

The  Commission  will  propose  a  Regulation  to  implement  the  scheme.  The  Regulation  will
define the products  covered; describe the  permit  /  licence  required  to  verify  that  timber  has
been legally harvested; specify the nature and mandate of any advisory or management bodies
set up to assist the Commission; and indicate the countries to which these  controls  apply as
per  the  voluntary  partnership  agreements.  It  will  also  make  provision  for  participating
countries  to  nominate  the  competent  authorities  for  issuing  and  verifying  the  licence  and
provide for administrative co-operation between EU and FLEGT partner country authorities.

12

Conditions  in  the  forest  sector,  and  the  overall  governance  environment,  vary  sharply  from
country to country. The details of the systems and structures required to verify that timber has
been  legally  harvested  in  the  country  of  origin  will  be  tailored  to  meet  these  different
conditions,  in  consultation  with  potential  partner  countries.  Detailed  proposals  will  also  be
contingent  on  the  results  of  studies  underway.  Licensing  and  associated  schemes  must  be
usable  by  industry  and  commerce  and  controllable  by  governments  and  other  relevant
services;  licensing  must  be  effective,  cost-effective,  reliable,  publicly  verifiable  and  not
penalise legitimate business.

There  will  be  some  elements  common  to  each  agreement  –  notably  that  partner  countries
should have  or  be  committed  to  developing  credible  legal  and  administrative  structures  and
technical systems  for the purpose  of  verifying  the  legality  of  wood  production  according  to
national laws. This implies:

(cid:1)  a  commitment  to  ensure  that  the  applicable  forest  law  is  consistent,  understandable  and

enforceable and is supportive of sustainable forest management principles;

(cid:1)  developing technical and administrative systems to monitor logging operations and identify

and track timber from the point of harvest to the market or point of export;

(cid:1)  building  checks  and  balances  into  the  tracking  and  licensing  system,  including  the
appointment of independent monitors, where this is considered necessary for the effective
functioning of the scheme; and

(cid:1)  developing procedures to licence the export of legally harvested timber.

Box  2  below  illustrates  some  of  the  steps  to  be  considered  for  a  hypothetical  Partnership
Agreement in a country wishing to establish a system with a third party monitoring element.

Box 2: An example of procedures under a hypothetical Forest Partnership Agreement

Step 1: The FLEGT Partner Country designates an accreditation body, which is empowered to appoint bodies
to certify the legality of wood products.

Step  2:  The  FLEGT  Partner  Country  designates  an  independent  monitor  and  sets  out  a  transparent  dispute
settlement mechanism.

Step 3: The EC confirms that the proposed system constitutes a credible system to verify that timber has been
legally harvested.

Step  4:  Certificates  are  issued  for  legally  harvested  timber,  allowing  customs  authorities  to  clear  legal
shipments for export. Information derived from the permits may also be made available to the general public
for inspection, for example through an electronic platform.

Step  5:  The  export  permit  denoting  legal  harvesting  is  produced  at  the  Community  port  where  timber  is
declared  for  free  circulation  in  the  EU,  and  checked  by  Member  State  customs  authorities  against  the
description of the consignment provided under pre-shipment notification.

Step  6:  Customs  only  accept  declarations  for  release  for  free  circulation  into  the  EU  when  timber  is
accompanied by the necessary export permit.

The  EU  will  also  seek  to  develop  regional  approaches  to  FLEGT  partnerships  in  order  to
implement coherent and efficient trade measures within interregional frameworks.

13

For  the  Association  of  South  East  Asian  Nations  (ASEAN),  an  important  timber-producing
region  where  illegal  logging  presents  a  challenge  to  several  member  countries,  the  forestry
sector has been identified as a potential priority area for enhanced future co-operation with the
EU. As part of the strategy for building relations with Southeast Asia, the  Commission  will
develop a trade action plan with the region – the Trans-Regional EU-ASEAN Trade Initiative
(TREATI)  –  comprising  dialogue  and  joint  activities  with  the  goal  of  facilitating  trade  and
investment  flows.  Building  on  bilateral  agreements,  it  is  hoped  that  these  activities  may
eventually  lead  to  the  establishment  of  a  regional  FLEGT  Partnership  Agreement  with
ASEAN.

If  appropriate,  interregional-FLEGT  partnership  agreements  will  be  promoted  by  the  EU  in
current regional trade negotiations with other regions, such as Central Africa, the wider group
of  Africa,  Caribbean  and  Pacific  (ACP)  countries,  and  Mercosur  as  a  contribution  to
sustainable  development,  in  line  with  the  overarching  goal  to  promote  sustainable
development agreed by the EU and it’s third country partners in the WSSD.

To implement the voluntary licensing of exports, the Commission will:

(cid:1)  enter into discussions with interested countries and regional organisations on the elements
of  proposed  FLEGT  partnership  agreements,  and  ensure  broad  stakeholder  participation.
This  includes  establishing  a  dialogue  in  the  current  frame  of  regional  trade  negotiations
with a view to promote interregional FLEGT partnerships;

(cid:1)  in  parallel  with  the  above,  request  the  authorisation  from  the  Council,  on  the  basis  of
article 133 of the TEC, to enter into negotiations on FLEGT Partnership Agreements with
timber  producing  countries;  and  present  to  the  Council  and  European  Parliament  a
Regulation setting up the voluntary licensing scheme;

(cid:1)  negotiate  with  interested  parties  and  regional  organisations  on  the  elements  of  proposed

FLEGT partnership agreements

(cid:1)  sign  Memoranda  of  Understanding14  to  work  towards  a  FLEGT  partnership  agreement

with interested countries; and

(cid:1)  conclude FLEGT Partnership Agreements with interested countries.

The  European  Commission  will  use  existing  structures  for  dialogue  with  potential  partner
countries  and  also  take  advantage  of  forest-related  international  meetings  and  processes  to
engage  with  potential  partner  countries,  in  particular  the  regional  FLEG  processes  co-
ordinated by the World Bank. Where there is interest in taking the discussion further, funding
for  support  activities  such  as  workshops  and  studies  will  be  provided  within  existing  co-
operation  instruments.  Collaboration  with  relevant  EU  Member  States  development  co-
operation programmes will be sought to strengthen the process.

14

Memoranda of Understanding will be brief statements of political intent to co-operate to address illegal
logging,  signed  by  the  EC  and  potential  partner  countries.  These  MoU  will  help  to  harness  existing
political will to address illegal logging while the longer process of setting up voluntary agreements is
ongoing.

14

                                                
4.2.4.  Additional legislative options

In the EU there is currently no Community legislation prohibiting the import and marketing of
timber  or  timber  products  produced  in  breach  of  the  laws  of  the  country  of  origin.  For  a
variety  of  reasons,  some  important  wood-producing  countries  may  choose  not  to  enter  into
FLEGT partnership agreements with the EU, despite the advantages outlined above in 4.2.3.
The  Commission  will  therefore  review  options  for,  and  the  impact  of,  further  measures,
including,  in  the  absence  of  multilateral  progress,  the  feasibility  of  legislation  to  control
imports of illegally harvested timber into the EU,  and report back to the Council on this work
during  2004.  Member  States  should  also  examine  how  the  trafficking  of  illegally  harvested
timber is addressed under national laws.

There  are  legislative  instruments  and  international  processes  which  may  help  to  inform  the
Commission’s position in this regard, including the US Lacey Act, which applies to fish and
wildlife products, and the Kimberly Process, an international initiative to control the trade in
conflict  diamonds.  The  UN  Convention  on  Transnational  Crime  may  also  be  a  useful
instrument for this aspect of the Action Plan.

On the legislative framework, the Commission will:

(cid:1)  undertake an analysis of the options for, and the impact of, further measures, including, in
the  absence  of  multilateral  progress,  the  feasibility  of  legislation  to  control  imports  of
illegally harvested timber into the EU, and report back to the Council on this work during
2004. Specific questions to be addressed will include the likely impact on customs services
responsible  for  enforcing  the  rules  and  procedures  for  distinguishing  legal  from  illegal
timber  arriving  from  countries  which  are  not  participating  in  the  voluntary  licensing
scheme;  and  how  to  treat  shipments  of  wood  from  non-partner  countries  which  are
suspected to be of illegal origin; and

(cid:1)  conduct consultations with forest sector stakeholders on the options for and the impact of

further legislative controls to address the imports of illegally harvested timber.

4.3. 

Public procurement

European Community legislation on public procurement is governed by Directives 92/50/EEC
(Services),  93/36/EEC  (Supplies)  and  93/37/EEC  (Works)  for  the  classical  sectors  and  by
Directive 93/38/EEC for the utilities sectors. The directives  were last  amended by  Directive
97/52/EC for the classical directives and by Directive 98/4/EC for the utilities directive.

The  above-mentioned  directives  are  currently  undergoing  a  complete  revision.  The
Commission  has  put  forward  a  proposal  for  a  new  joint  directive  for  the  classical  sectors,
combining the Services, Supplies and Works Directives, and has proposed a revised directive
for the utilities sector.  These  proposals  are  currently  going  through  a  co-decision  procedure
with the Council and the European Parliament.

The current public procurement legislation, as well as the proposed future legislation, offers a
number  of  possibilities  for  taking  into  account  environmental  considerations  in  public

15

procurement  procedures.  The  Commission  has  recently  presented  a  Communication  which
sets out the possibilities under the current legislation.15

In line with this Communication on public procurement and the environment, a Handbook on
Green  Procurement  is  being  developed.  This  will  present  clear  guidance  and  best  practice
examples on the utilisation of environmental considerations in public procurement procedures
as part of the drive towards sustainable development.

On public procurement, the Commission will:

(cid:1)  use  the  Handbook  on  Green  Procurement  to  show  that  under  the  public  procurement
directives  it  is  possible  to  take  into  account  legally  harvested  timber  and  products  made
from  such  timber.  Environmental  aspects  of  sustainable  forest  management  can  be  taken
into  consideration  in  public  procurement.  Schemes  that  certify  sustainable  forest
management  cover  environmental  considerations  and  other  issues  including,  usually,  the
legality  of  harvesting  of  the  timber.  Certification  of  sustainable  forest  management  can
therefore act as a means of proof of compliance with these environmental requirements and
increase  the  likelihood  that  the  public  authority  is  being  supplied  with  legally  harvested
timber. Such a request should be integrated into the definition of the subject matter of the
contract  and  the  technical  specifications  of  the  call  for  tender.  This  possibility  will  also
apply in the proposed future procurement directives.

(cid:1)  draw  the  attention  of  Member  State  governments  to  the  fact  that  illegal  logging  can  be

addressed through the adoption of procurement policies as described above.

Member  States  should  make  use  of  their  competencies  in  this  field.  For  example,  both  the
present  and  the  proposed  future  public  procurement  Directives  mention  the  possibility  of
excluding  a  bidder  from  a  contract  for  ‘grave  professional  misconduct’.  The  definition  of
grave  professional  misconduct  is  an  issue  of  Member  State  competence.  For  application  of
this  exclusion  criterion,  Member  States  will  have  to  examine  whether  deliberately  handling
illegally harvested timber would constitute grave professional misconduct according to their
national law.

4.4. 

Private sector initiatives

A fourth theme which the Commission proposes to address through the Action Plan is that of
private  sector  initiatives  based  on  principles  of  corporate  social  responsibility.  The  private
sector has a key role to play in combating illegal logging, and can exert a direct and positive
influence through a network of business relationships extending from the forest to the market
place.  A  recent  Communication16  on  corporate  social  responsibility  defines  the  concept  as
when  “companies  integrate  social  and  environmental  concerns  in  their  business  operations
and in their interactions with stakeholders on a voluntary basis”.

This theme relies less on prescriptive  policy measures  and  more  on encouraging  the  private
sector in the EU to work with the private sector in timber-producing  countries  according  to
voluntary codes of practice for timber harvesting and procurement, supplemented by rigorous
voluntary  independent  audit  of  the  supply  chain.  This  approach  is  likely  to  be  particularly

15

16

the  possibilities  for 

Commission  Interpretative  Communication  on  the  Community  law  applicable  to  public  procurement
and 
into  public  procurement,
integrating  environmental  considerations 
COM(2001) 274 final, see http://simap.eu.int/EN/pub/src/welcome.htm, under ‘rules and guidelines’.
COM(2002) 347 final, 2 July 2002

16

                                                
effective in cases where the trade is dominated by relatively few suppliers and importers into
the EU. The voluntary licensing scheme described in section 4.2 above will also greatly assist
this type of initiative.

European  businesses  working  in  the  forest  sector  are  developing  a  number  of  initiatives  to
introduce  more  socially  and  environmentally  responsive  approaches  into  their  business
practices. One such scheme is being developed by the Tropical Forest Trust17 (Box 3).

A number of interesting initiatives outside the forest sector are also currently pushing forward
the  boundaries  of  corporate  social  responsibility.  Notable  among  these  is  the  Extractive
Industries Transparency Initiative, which was launched at the World Summit on Sustainable
Development and now being further developed by the G8. The initiative aims to address the
key issue of governance of natural resources and the revenues flowing from their extraction.
Although  the  initiative  focuses  on  oil,  gas,  and  mining  and  does  not  include  timber,  it
nevertheless establishes interesting principles for co-operation between the private sector and
producer  and  consumer  countries  which  could  be  applicable  in  the  context  of  the  FLEGT
programme.

Box 3: The Tropical Forest Trust approach

The TFT works by linking the wood supply chain from producers to suppliers and on to buyers who wish to
procure sustainable and legal timber products.

Members  participate  in  the  scheme  because  they  have  neither  time  nor  human  resources  within  their  own
organisations  to  manage  the  very  complex  process  of  moving  forests  towards  certification  and  ensuring  a
future supply of legal and sustainable timber. The TFT manages this process for them.

TFT members invest a fixed percentage of their product’s gross margin to fund TFT activities. Members get
a  return on  their  investment  by  securing  a  more  ethical  wood  supply.  TFT  members  gain  access  to  timber
products  generated  by  specific  projects  they  are  supporting  –  before  the  project  achieves  certification
members  have  the  security  of  knowing  that  their  supply  chain  originates  in  a  project  that  is  demonstrably
moving  towards  certification  with  TFT  assistance  and  monitoring.  Having  established  such  a  close
relationship with these projects, TFT members have the opportunity to secure a long-term supply of certified
timber products once the project is certified.

Activities initiated under the TFT scheme include:

1. Assistance with the development of codes of conduct / wood procurement policies;
2.  Assistance  with  understanding  the  current  situation  on  forest  policy,  stakeholder  views,  and  producing
country issues;
3. Assistance with the identification of legal sources that can progress towards sustainable and certified;
4. Baseline and on-going assessments of forest management;
5. Technical assistance to improve forest management; and
6. Audit of members performance.

On private sector initiatives, the Commission will:

(cid:1)  draw lessons from new initiatives for corporate social responsibility, and examine ways of

applying these lessons in the forest sector;

17

The Tropical Forest Trust is an organisation established to assist purchasers of tropical timber to source
from sustainably managed forests and build capacity for certification.

17

                                                
(cid:1)  promote private sector initiatives, including support for the establishment of co-ordinating
bodies, the adoption of high standards in codes of conduct, transparency in private sector
activities, and independent monitoring;

(cid:1)  provide  support  for  capacity  building  in  developing  countries  to  initiate  private  sector

initiatives , for example in forest monitoring; and

(cid:1)  encourage active private sector participation, including with a view to: providing technical
and  financial  assistance  to  ensure  legality  throughout  the  supply  chain;  developing  and
implementing codes of conduct and  supply  chain  management  systems;  using  of  internal
and external  audit to verify compliance with the supplier code of  conduct;  assisting  with
the  third  party  verification  of  the  supply  chain  from  source  to  end  user;  and  reporting
publicly in an agreed format on progress towards ensuring legality of products.

4.5. 

Financing and investment

The fifth element of the Action Plan addresses the question of financing institutions and the
investment of funds in projects which potentially encourage illegal logging.

4.5.1. 

Improved due diligence

Large-scale capital investments in the forest sector, such as pulp and paper mills, can have a
high risk attached to them if they do not have clearly defined, legal and sustainable supplies
of  timber  over  the  long-term.  These  operations  are  liable  to  disruption  due  to  the
environmental  and  social  damage  which  they  cause,  but  current  practice  in  banks  and
financial institutions for screening  and risk assessment of  forest sector investments does not
sufficiently take this into account.

Banks and financial institutions investing in forest sector operations should be encouraged to
assess the risk attached to the social and environmental factors which could have a bearing on
the  viability  of  their  investments.  Social  factors  which  are  of  relevance  to  forest  sector
investments include conflict over land  and  access  to  forest resources  (for  example,  disputed
land  ownership,  or  contradictions  between  official  and  traditional  land  ownership  rights).
Relevant environmental factors include the lack of a long-term supply of legal and sustainable
timber  (in  which  case  the  company  could  come  to  have  an  implicit  reliance  on  illegally
harvested timber).

On improved due diligence, the Commission will:

(cid:1)  encourage  banks  and  financial  institutions  to  take  environmental  and  social  factors  into
account  when  conducting  due  diligence  and  assessing  the  viability  of  investments  in  the
forest sector. Particular attention must be devoted to investigating the supply and source of
timber available over the longer term;

(cid:1)  foster the development of specific procedures  for environmental  and social due  diligence
for  Export  Credit  Agencies  (ECAs),  the  European  Investment  Bank  and  the  Cotonou
Investment Facility, since these operate with public money. Project  screening  procedures
should ensure there is no evidence or undue future risk of illegal forest sector activity; and

(cid:1)  identify  ways  to  assist  Export  Credit  Agencies  and  other  public  lending  bodies  to  obtain

better information about forest sector investments and the associated risks; and

18

4.6. 

Supporting the Action Plan with existing legislative instruments

4.6.1.  Money laundering

Under Council Framework Decision of 26 June 2001 (2001/500/JHA),18 EU Member States
agreed to criminalise the laundering of the proceeds of "serious offences". Such offences shall
in  any  event  include  offences  which  are  punishable  by  deprivation  of  liberty  or  a  detention
order for a maximum of more than one year or, as regards those states which have a minimum
threshold for offences in their legal system, offences punishable by deprivation of liberty or
detention order for a minimum of more than six months. The criminalisation of the laundering
of the proceeds from illegal logging or related offences would thus depend on whether such
activity  constituted  a  serious  offence  in  each  Member  State  in  accordance  with  the  above-
mentioned definition.

The  EU  anti-money  laundering  directive  of  1991,19  as  amended  in  2001,20  obliges  Member
States  to  act  against  money  laundering,  notably  by  requiring  financial  institutions  to  report
any  suspicions  of  money  laundering.  It  covers  the  laundering  of  the  proceeds  from  a  wide
range  of  serious  crimes  but  does  not  define  serious  offences  in  the  same  way  as  in  the
Framework Decision referred to above. Article 1(E) of the amended Directive does, however,
require  an  alignment  of  the  Framework  Decision  definition  of  serious  crime  before  15
December  2004  on  the  basis  of  a  Commission  proposal.  Under  the  2001  amendment  some
crimes are listed while others fall under a general reference to offences generating substantial
proceeds  or  carrying  a  severe  term  of  imprisonment.  Thus  Member  States  could,  if  they
wished,  treat  crimes  relating  to  illegal  logging  as  serious  offences  for  the  purposes  of  the
Directive.  Currently  only  a  small  number  of  Member  States  designate  crimes  relating  to
illegal logging under money laundering legislation. It should be noted that the Directive states
that money laundering shall be regarded as such even where the activities which generated the
property to be laundered were carried out in the territory of another Member State or in that of
a third country.

On money laundering, the Commission will:

(cid:1)  undertake  work  to  establish  the  extent  to  which  existing  Member  State  legislation  for
money  laundering  is  applicable  to  forest  sector  crimes,  and  disseminate  this  information
widely  to  banks,  financial  institutions,  financial  crimes  units  and  non-government
organisations in the European Union;

(cid:1)  encourage Member States to  designate  illegal  logging  as  a  crime  for  the  purposes  of  EC

Directive 97/2001 on money laundering;

(cid:1)  provide development co-operation assistance, where appropriate, to strengthen developing

country capacity to deal with forest-related money laundering issues; and

(cid:1)  encourage information sharing between the financial crimes units of the EU Member States

on forest-related crimes.

18

19

20

OJ L 182, 5.7.2001, p.1.
Directive 91/308/EEC, OJ L 166, 28.6.1991, p.77.
Directive 2001/97/EC, OJ L 344, 28.12.2001, p. 76.

19

                                                
4.6.2.  The Convention on Trade in Endangered Species (CITES)

The 1973 Convention on Trade in Endangered Species (CITES) has an important role to play
in controlling trade in endangered tree species. All EC Member States are Parties to CITES,
as are all the candidate countries. CITES is currently implemented in Community law through
Council Regulation (EC) No 338/97 of 9  December 1996  and Commission Regulation (EC)
No 1808/2001 of 30 August 2001. CITES has developed mechanisms to ensure that trade in
listed species is both legal and sustainable.

Currently 19 tree species are listed in Appendices I and II of CITES. Such a listing means that
timber products from these species can only be imported into the EU when accompanied by
an  export  permit  from  the  country  of  origin  and  an  EU  import  permit.  An  export  permit  is
valid  only  if  the  timber  was  harvested  legally  within  the  country  of  origin.  An  EU  import
permit can only be granted when it is established that the granting of such a permit would not
have a detrimental effect on the survival of the species or the extent of the territory occupied
by  it.  Furthermore  one  genus  and  three  tree  species  are  listed  in  Appendix  III  –  where
countries  have  unilaterally  restricted  exports  of  such  species.  Once  again,  export  permits
granted for such species are only valid if the timber has been harvested legally.

At  the  12th  CITES  Conference  of  the  Parties  in  2002  it  was  agreed  to  place  restrictions  on
trade  in  big  leaf  mahogany  (by  listing  in  Appendix  II)  due  to  concerns  about  over-
exploitation, as well as on species of the Guaiacum genus (lignum vitae, tree of life). On the
basis  of  scientific  evidence  it  may  be  decided  to  add  further  tree  species  in  future  –  there
would appear to be a number of potential candidate species.

On  the  Convention  in  International  Trade  in  Endangered  Species  (CITES),  the
Commission will:

(cid:1)  promote research on  endangered timber  species to  justify  their  inclusion  in  Appendices  I
and  II  to  CITES,  and  encourage  wood-producing  countries  to  use  voluntary  listing  of
timber species under Appendix III;

(cid:1)  work to address weaknesses in the permit system which regulates trade in species listed in

the Appendices to the Convention; and

(cid:1)  encourage  third  countries  to  manage  CITES-listed  species  sustainably  in  order  to  avoid

potential import restrictions under Article 4 of Council Regulation 338/97.

4.6.3.  Other legislative instruments

Member  State  legislation  for  stolen  goods  and  other  legislation  may  in  some  cases  be
applicable  to  illegal  logging.  This  legislation  would  allow  illegally  harvested  timber  to  be
dealt  with  in  consumer  countries,  rather  than  being  stopped  at  the  port  of  entry.  Such
legislation is a Member State competence.

The  OECD  Convention  on  Bribery  and  Corruption  is  also  relevant,  since  illegal  logging
operations are virtually synonymous with bribery and corruption.

20

On other legislative instruments, the Commission will:

(cid:1)  Raise awareness, and encourage Member States to apply existing criminal legislation and
other legislative instruments, including, where applicable, legislation for stolen goods, and
compile and exchange relevant information.

(cid:1)  Encourage  Member  States  to  apply  measures  set  out  in  the  OECD  Action  Statement  on
Combating Bribery, including the refusal to approve credit, cover or other support where
evidence is shown that bribery was involved in the award of an export contract.

4.7. 

Conflict timber

Conflict timber is loosely defined  as timber traded by armed  groups, the proceeds  of which
are  used  to  fund  armed  conflicts.  It  is  usually  unauthorised  by  the  relevant  government
agencies and therefore illegal, but can sometimes be “legal” if authorised by the government
and taking place in an area under its control. The final report of the expert panel on the illegal
exploitation  of  natural  resources  and  other  forms  of  wealth  in  the  Democratic  Republic  of
Congo21 recommended that an international definition of conflict timber be developed.

On conflict timber, the Commission will:

(cid:1)  support work to define conflict timber – a necessary starting point for any further action to

be taken at the international level.

(cid:1)  follow up in relevant international fora any recommendations in this regard which the UN

Security Council may make.

(cid:1)  work to recognise and address in its development co-operation programmes the role forests
play in the context of conflicts, and address relevant issues including local and indigenous
peoples’ rights to the forests they depend on for a living, and good governance in remote,
sparsely populated forest areas; and

(cid:1)  initiate discussion with Member States, other donors and forested countries on the role of
forests during conflicts and in pre- and post- conflict situations, and how this can best be
taken into account in work related to forest law enforcement and governance.

5. 

CO-ORDINATION AND PROGRAMMING

As  a  cross-cutting  issue,  action  on  forest  law  enforcement,  governance  and  trade  requires  a
high  level  of  co-ordination  across  different  sectors  and  between  different  players.  A  co-
ordination mechanism will be established within the Commission to:

(cid:1)  act as a central focal point for the FLEGT  initiative,  and facilitate the  implementation of

the FLEGT Action Plan, including through existing instruments;

(cid:1)  provide technical inputs for the development of partnership agreements with major wood-

producing countries;

21

UN Security Council document S/2002/1146, 16 October 2002

21

                                                
(cid:1)  develop  a  detailed  and  co-ordinated  work  plan  for  the  FLEGT  Action  Plan  with  EU

Member States;

(cid:1)  support a process of consultation with major forest sector stakeholders and other relevant

parties on the FLEGT initiative in the EU and in potential partner countries;

(cid:1)  co-ordinate the Commission’s support to ongoing international initiatives to build political
commitment to  address illegal  logging,  in  particular  the  Africa,  Asia  and  proposed  Latin
America  initiatives  for  forest  law  enforcement  and  governance,  and  co-ordinate
Commission positions in relation to dialogue with G8 countries and China;

(cid:1)  ensure  that  the  technical  inputs  and  expertise  required  to  implement  the  FLEGT
programme  are  made  available.  Immediate  short  term  technical  inputs  which  are  needed
include:

–  investigation  of  the  importance  of  illegal  logging  in  international  trade,  and  the

potential for indirect and spill over effects from measures taken by the EU;

–  economic  analysis  of  the impact  of illegal logging  to  affected  countries –  where

this does not already exist – and the global economy; and

–  follow-on technical development and technical assistance to introduce systems for
log  tracking  and  legality  verification  both  in  the  EU  and  in  FLEGT  Partner
Countries.  (A  scoping  exercise  for  this  is  currently  being  financed  by  the
Commission.)

(cid:1)  assist development of a strategy to expand the focus of the initiative to include other major

wood-consuming markets; and

(cid:1)  monitor  the  evolving  impact  of  the  programme  on  forest  sector  stakeholders,  including
forest-based  industries  in  the  EU  and  wood-producing  countries,  and  governments  and
local communities in wood-producing countries.

As an initial step, the inter-service co-ordination group established for the development of the
Action Plan will be maintained as a mechanism to co-ordinate activities. The Tropical Forest
budget line, as well as other development co-operation financial instruments, will contribute
to the implementation of the Action Plan.

The  Commission  will  work  to  implement  the  Action  Plan  jointly  with  Member  States  and
partner  countries.  The  Commission  will  encourage  a  joint  approach  with  Member  States,
including  through  co-ordination  through  the  European  Tropical  Forest  Advisers  Group
(ETFAG),22 and similar in-country co-ordination fora. In the short term, operational funds to
initiate the FLEGT Action Plan will mainly be provided from the Tropical Forest Budget Line
(B7-6200).  The  funds  will  be  used  to  perform  the  tasks  identified  as  a  priority  for  the
initiation of the FLEGT programme, where these are eligible for funding under the Regulation
governing  the  budget  line  and  in  line  with  the  biannual  programming  of  the  budget  line.  It
should be noted that the Tropical  Forest  Budget  Line  can only be used to  fund  activities  of
benefit  to  developing  countries.  The  Regulation  governing  the  Tropical  Forest  Budget  Line
will  expire  at  the  end  of  2006.  The  need  to  ensure  the  availability  of  resources  to  fund

22

The  European  Tropical  Forest  Advisers  Group  (ETFAG)  is  a  forum  which  exists  to  promote  co-
ordination between the Commission and Member States active in the forest sector.

22

                                                
FLEGT-related  activities  will  be  an  important  factor  to  be  taken  into  account  by  the
Commission when considering whether to propose a new Regulation.

Funds  available  under  the  budget  line  may  be  insufficient  to  support  the  programmes  of
technical  assistance  and  capacity  building  required  in  wood-producing  FLEGT  partner
countries.  Where  appropriate,  the  Commission  will  thus  work  to  integrate  the  FLEGT
programme  into  the  EC’s  main  country-based  and  regional  development  co-operation
programmes.  Interested  Member  States  will  also  be  encouraged  to  contribute  resources  or
activities to a common work plan.

6. 

THE NEXT STEPS

The Council and European Parliament are asked to endorse the Commission’s proposals to:

(cid:1)  enter into negotiations for FLEGT Partnership Agreements with wood producing countries;

(cid:1)  present a Regulation setting up the voluntary licensing scheme, in conjunction with wide

stakeholder consultation; and

(cid:1)  review  options  for,  and  consider  the  impact  of,  further  measures  to  support  the  Action
Plan,  including,  in  the  absence  of  multilateral  progress,  the  feasibility  of  legislation  to
control imports of illegally harvested timber, and report back to the Council on this work
during 2004.

(cid:1)  Member  States  are  also  asked  to  identify  relevant  national  legislation  which  could  be
applied  to  address  the  illegal  logging  issue,  and  to  inform  the  Commission  of  their
findings.

23

ANNEX 1: ONGOING INITIATIVES FOR IMPROVED FOREST LAW ENFORCEMENT

ANNEXES

A great deal of effort has been put into national, regional and international initiatives to raise
commitment and initiate work programmes to tackle illegal logging. Many of these initiatives
involve the European Commission and EU Member States, through delegations to multilateral
processes,  direct  policy  initiatives,  and  programmes  of  development  co-operation.  These
initiatives are summarised below.

International initiatives

At an international level, the first major public pronouncement was made at the G8 summit in
Birmingham in 1998. A working group set up after the Birmingham summit reported back to
the G8 meeting in Canada in 2002. This report proposed measures for the identification and
verification  of  legal  production,  timber  tracking,  labelling  and  certification,  linked  to
measures denying market access to illegal products, public procurement policy, and assistance
for capacity building and forest management. The G8 also stated a commitment to identifying
actions in both producer and consumer countries.

Statements have also been made in other multilateral fora. In November 2001, the 31st session
of the International Tropical Timber Council (ITTC) (ITTC-31) adopted a decision on forest
law enforcement in the context of sustainable timber production and trade. In May 2002, the
32nd session of the ITTC (ITTC-32) adopted a decision on forest law enforcement in Africa
to  undertake  data  collection  on  forests  in  the  Central  African  Republic,  the  Democratic
Republic  of  Congo,  and  the  Republic  of  Congo,  aimed  at  improving  forest  concession
management and ensuring conservation in protected areas.

In  March  2002,  the  second  session  of  the  UN  Forum  on  Forests  (UNFF-2)  developed  a
Ministerial Message to the World Summit on Sustainable Development (WSSD) that among
other things calls for immediate action on domestic forest law enforcement and international
trade  in  forest  products.  In  addressing  progress  in  combating  deforestation  and  forest
degradation,  UNFF-2  also  highlighted  the  vital  role  of  initiatives  to  strengthen  law
enforcement, and urged governments to address law enforcement and illegal logging.

The Convention on Biological Diversity in 2002 adopted an Expanded Work Programme on
Forest  Biological  Diversity,  which  includes  proposed  actions  concerning  the  promotion  of
forest law enforcement and measures to address the related trade.

Regional initiatives

The  World  Bank  is  co-ordinating  regional  initiatives  for  forest  law  enforcement  and
governance in Asia and Africa.23 In Asia a series of regional planning meetings culminated in
a  ministerial  conference  in  Bali,  Indonesia  in  September  2001.  The  meeting  issued  a
Ministerial Declaration: “Recognising that all countries, exporting and importing, have a role
and  responsibility  in  combating  forest  crime,  in  particular  the  elimination  of  illegal  logging

23

Full details of these initiatives can be found at:
http://lnweb18.worldbank.org/ESSD/essdext.nsf/14ByDocName/ForestGovernanceProgramMinisterial
Processes

24

                                                
and  associated  illegal  trade”  (Annex  3).  An  Asian  FLEG  Task  Force  has  been  set  up,  with
industry  and  non-government  organisation
associated  advisory  bodies  consisting  of 
representatives,  and  a  substantial  programme  of  work  is  now  ongoing.  Ministers  are  due  to
meet again to review progress later in 2003.

In  Africa,  a  Ministerial  Conference  is  due  to  take  place  in  2003.  This  meeting  aims  to
galvanise  commitment  in  Africa  at  a  high  political  level  to  strengthen  capacity  for  forest
governance,  in  particular  with  regard  to  illegal  logging.  It  is  expected  that  participants  will
endorse a Ministerial Declaration and a follow-up programme of work will be launched.

The European Commission and a number of EU Member States have provided strong support
to  these  processes  in  Asia  and  Africa  –  both  through  political  support  and  financial
contributions.

Illegal logging and governance also form a focus of two major type II partnerships launched
at  the  World  Summit  on  Sustainable  Development  (WSSD)  –  the  Asia  Forest  Partnership,
launched by Japan and  Indonesia,  and the  Congo  Basin  Forest  Partnership,  launched  by  the
United States and South Africa.

European Commission initiatives

The  European  Commission  set  out  its  intention  to  combat  the  illegal  logging  and  the
associated trade in its Communication to the Council and the European Parliament on a global
partnership  for  sustainable  development24  and  in  the  6th  Community  Environmental  Action
Plan.25

To  assist  with  the  preparation  of  this  Action  Plan,  the  Commission  hosted  an  international
workshop in Brussels from 22-24 April 2002. The workshop was attended by representatives
of  the  EU  Member  States,  the  governments  of  several  non-EU  wood-producing  and  wood-
importing countries, the forest industry, and non-government organisations.

The  workshop  examined  methods  of  controlling  the  entry  of  illegally  harvested  timber  into
the EU, including through the use of legislation and a licence of legality; data exchange and
collaboration  between  customs  authorities;  due  diligence  by  financing  institutions;  and  the
role of public procurement policy. Further details of the workshop are available online at:

http://europa.eu.int:8082/comm/external_relations/flegt/intro/index.htm

The European Commission then hosted a side event on illegal logging at the World Summit
on Sustainable Development (WSSD) in Johannesburg, in August 2002. The EU, the United
States  and  Japan  were  all  present.  At  the  side  event,  which  also  included  producer  country
governments, and representatives of the private sector and non-government organisations, all
parties expressed agreement of the need to work together to tackle illegal logging.

EU Member State initiatives

EU Member States are undertaking many different actions to combat illegal logging and the
associated  trade.  Without  prejudice  to  their  conformity  with  EU  laws,  the  following
paragraphs provide some examples of the types of activities which are ongoing.

24

25

COM(2002) 82, 13.2.02
Decision N° 1600/2002/EC of the European Parliament and the Council, 22 July 2002

25

                                                
Denmark,  in  its  capacity  as  serving  EU  president,  jointly  hosted  a  side  event  on  illegal
logging  at  the  World  Summit  on  Sustainable  Development  (WSSD)  with  the  European
Commission  in  August  2002.  The  government  places  considerable  priority  on  combating
illegal  logging  and  related  trade,  and  among  other  actions  already  taken,  Denmark  is  at  an
advanced stage of producing guidelines for public procurement of tropical timber, aiming to
ensure that only legal and sustainable timber will be purchased by public institutions.

Finland is in the process of defining a strategy for forest development co-operation, and this
may  include  a  focus  on  illegal  logging.  The  Finnish  Forest  Industries  Federation  have  also
issued a statement of their support for efforts to eradicate illegal logging, which is available at
http://english.forestindustries.fi/press/2002/081102.html.

France is providing support to the Africa Forest Law Enforcement and Governance (AFLEG)
process, in partnership with the US, UK, Switzerland and the Commission. Issues concerning
illegal  logging  and  trade  will  also  be  addressed  in  co-operation  projects  at  the  regional  and
national level through activities focused on capacity building, data collection and support for
the  control  of  forest  activities.  France  is  also  working  to  encourage  the  commitment  of  the
private sector, and in particular is encouraging French corporations to implement the code of
conduct targeted at Forest Management.

A dialogue has been initiated within the National Working Group for Tropical Humid Forests
in order to address the issue of illegal logging at the national level through awareness raising
and the use of specific policy instruments, such as public procurement. A study on the impact
of  public  procurement  measures  has  been  launched  and  is  being  managed  by  the  ministries
responsible for the environment and forests. The French Development Agency (AFD) is also
working  on  the  possible  options  to  strengthen  controls  in  the  implementation  of  the  Forest
Management Plans supported by French Development Co-operation.

Germany in 2002 approved a new strategy for development co-operation in the forest sector.
Combating  illegal  logging  is  amongst  a  number  of  priorities  identified  for  German
development  co-operation  in  the  sector.  The  strategy  proposes  to  fight  illegal  logging  and
timber trafficking, as well as trade in other illegally harvested forest products (e.g. game and
bush-meat), by addressing the following areas for action: Developing transparent procedures
as a  basis for issuing concessions and utilisation  licences;  establishing  effective  control  and
penalty  mechanisms  (law  enforcement);  ensuring  civil  society  participation  in  these
processes;  creating  incentives  in  import  countries  for  public  and  private  procurement  of
independently certified  timber  and  wood  products  from  sustainable  forest  management;  and
assisting  partner  countries  with  their  efforts  to  implement  and  further  develop  the  CITES
endangered  species  convention  (particularly  protection  of  the  endangered  species  listed  and
inclusion of further species in Annex 3). Action in these areas will be implemented through
development co-operation programmes as and where appropriate.

The full strategy document in available in English online at:

http://www.gtz.de/forest-policy/download/Documents/German%20Government/BMZ_Forest_Sector_Concept_2002.pdf

The Netherlands does not have a specific policy on illegal logging, but some relevant actions
are  being  taken  within  the  Netherlands  and  overseas  through  development  co-operation
programmes. The subject is attracting increasing attention.

26

Within the Netherlands, listing in the appendices of the Convention on Trade in Endangered
Species  (CITES)  is  being  used  to  control  the  illegal  trade  in  endangered  tree  species.  The
Netherlands is also supporting a specific programme on the "Evaluation of tree species using
the  CITES  listing  criteria"  to  further  the  usefulness  of  the  Convention  in  protecting
endangered  tree  species.  The  Netherlands  also  actively  promotes  timber  certification
processes, which include a focus on the legality of sources in the country of origin.

Through  development  co-operation,  by  way  of  projects  and  the  sectoral  approach,  the
Netherlands  is  supporting  initiatives  to  promote  good  governance  in  the  forest  sector  in
several  developing  countries,  including  Peru,  Guatemala,  Ecuador,  and  Surinam.  The
Netherlands  is also financing  a number  of smaller  relevant  projects  implemented  by  IUCN-
Netherlands in a number of countries.

The United Kingdom is supporting both the Asia and Africa Ministerial Process for  Forest
Law  Enforcement  and  Governance.  The  issue  is  addressed  through  both  policy  actions  and
country programmes in Indonesia, Cameroon and parts of Central America (among others). In
April  2002  the  United  Kingdom  signed  a  Memorandum  of  Understanding  with  the
Government of  Indonesia to combat illegal  logging  and the  associated international trade in
illegally logged timber and wood products. The MoU includes agreement to work together on
legal  and  administrative  reforms,  legality  verification  systems,  and  financial  and  technical
assistance. Both the process leading up to the signing of this MoU, and the issues which have
subsequently arisen with respect to its implementation, offer valuable lessons for elements of
the  Action  Plan  which  the  European  Commission  is  now  preparing.  The  UK  is  also  at  an
advanced  stage  of  reforming  public  procurement  policy  to  ensure  that  only  legal  and
sustainable timber is purchased by public institutions.

27

ANNEX 2: A SUMMARY OF THE INTERNATIONAL TRADE IN TIMBER

The world market for the production, processing and trading of wood is largely dominated by
the  temperate  zones  and  developed  countries  (US,  EU,  Canada,  Japan).  Tropical  products
account  for  a  small  proportion  of  total  world  exports  of  wood, namely  16%  of  industrial
roundwood, 13%  of  sawnwood, pulp and  paper  and 39% of panels.  Only  plywood  made  of
tropical hardwood accounts for a dominant proportion of the international market (71%).

Another  particularity  of  world  trade  in  wood  products  is  that  much  of  the  trade  in  forest
products is within regions. According to the World Bank, 80% of Europe's trade is between
European countries, 85% of exports from countries in Asia are to countries in the same region
and  80%  of  North  American  imports  come  from  within  the  region.  The  only  major  inter-
regional trade flows (over US$5 billion) are from North America to Europe and from North
America and Europe to Asia and Oceania.26

Nevertheless, the figures below confirm the potential for EU trade-based measures to exert an
influence on the global trade in timber, and also highlights the importance of working towards
wider collaboration on this issue with the other major wood consuming countries in the longer
term.

Roundwood

Key points to note:

(cid:1)  Demand for roundwood from Asian producer countries is dominated by China and Japan.

(cid:1)  The EU is the largest importer of African roundwood by value.

(cid:1)  Trade in roundwood from South America is negligible.

(cid:1)  Imports of roundwood by China, Japan and the EU from Russia are of roughly equal value

(although the EU is the largest importer by volume).

Roundwood exports by region and major market

m
$
S
U

1,600

1,400

1,200

1,000

800

600

400

200

0

U
E

i

a
n
h
C

n
a
p
a
J

A
S
U

(1): Including others

)
1
(

l

a
t
o
T

U
E

i

a
n
h
C

n
a
p
a
J

A
S
U

)
1
(

l

a
t
o
T

U
E

i

a
n
h
C

n
a
p
a
J

A
S
U

)
1
(

l

a
t
o
T

U
E

i

a
n
h
C

n
a
p
a
J

A
S
U

)
1
(

l

a
t
o
T

Asia

Africa

South America

Russia

Source: FAO FAOSTAT online database

26

World Bank. Future Developments in Forest Products Markets (1999).

28

 
 
 
 
                                                
Sawnwood

Key points to note:

(cid:1)  The EU is the second largest market for sawnwood from Asia, accounting for 21% of the

trade with Asia by value.

(cid:1)  The EU is the largest importer of sawnwood from Africa, accounting for 91% of Africa’s

trade by value with the four major markets.

(cid:1)  The EU accounts for 38% of the value of sawnwood exports from South America.

(cid:1)  EU imports account for nearly half of Russia’s trade in sawnwood.

Sawnwood exports by region and major market

m
$
S
U

1,800

1,600

1,400

1,200

1,000

800

600

400

200

0

U
E

i

a
n
h
C

n
a
p
a
J

A
S
U

U
E

i

a
n
h
C

n
a
p
a
J

A
S
U

)
1
(

l

a

t

o
T

U
E

i

a
n
h
C

n
a
p
a
J

A
S
U

)
1
(

l

a

t

o
T

)
1
(

l

a

t

o
T

U
E

i

a
n
h
C

n
a
p
a
J

A
S
U

)
1
(

l

a

t

o
T

(1): Including others

Asia

Africa

South America

Russia

Source: FAO FAOSTAT online database

Plywood

Key points to note:

(cid:1)  The  EU  is  the  second  largest  market  for  Asian  plywood,  accounting  for  9%  of  trade  by

value.

(cid:1)  The  EU  is  the  largest  importer  of  plywood  from  Africa,  accounting  for  43%  of  Africa’s

(very modest) trade by value.

(cid:1)  The EU accounts for 51% of the value of plywood exports from South America.

(cid:1)  EU imports account for nearly half of Russia’s plywood exports.

29

 
 
 
 
Plywood exports by region and major market

m
$
S
U

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

U
E

i

a
n
h
C

n
a
p
a
J

A
S
U

)
1
(

l

a

t

o
T

U
E

i

a
n
h
C

n
a
p
a
J

A
S
U

)
1
(

l

a

t

o
T

U
E

i

a
n
h
C

n
a
p
a
J

A
S
U

)
1
(

l

a

t

o
T

U
E

i

a
n
h
C

n
a
p
a
J

A
S
U

)
1
(

l

a

t

o
T

Asia

Africa

South America

Russia

(1): Including others

Source: FAO FAOSTAT online database

30

 
 
 
 
ANNEX 3: THE BALI DECLARATION

FOREST LAW ENFORCEMENT AND GOVERNANCE

EAST ASIA MINISTERIAL CONFERENCE

Bali, Indonesia

11 – 13 September 2001

MINISTERIAL DECLARATION

Countries from the East Asian and other regions participating in this Ministerial Conference:

Understanding  that  forest  ecosystems  support  human,  animal  and  plant  life,  and  provide  humanity
with a rich endowment of natural, renewable resources;

Deeply concerned with the serious global threat posed to this endowment by negative effects on the
rule  of  law  by  violations  of  forest  law  and  forest  crime,  in  particular  illegal  logging  and  associated
illegal trade;

Recognising  that  illegal  logging  and  associated  illegal  trade  directly  threaten  ecosystems  and
biodiversity in forests throughout Asia and the rest of our world;

Also recognising the resulting serious economic and social damage upon our nations, particularly on
local communities, the poor and the disadvantaged;

Further  recognising  that  the  problem  has  many  complex  social,  economic,  cultural  and  political
causes;

Convinced  of  the  urgent  need  for,  and  importance  of  good  governance  to,  a  lasting  solution  to  the
problem of forest crime;

Recognising that all countries, exporting and importing, have a role and  responsibility  in combating
forest crime, in particular the elimination of illegal logging and associated illegal trade;

Emphasising  the  urgent need for  effective  co-operation  to  address  these  problems  simultaneously  at
the national and sub-national, regional and international levels;

Declare that we will:

Take  immediate  action  to  intensify  national  efforts,  and  to  strengthen  bilateral,  regional  and
multilateral  collaboration  to  address  violations  of  forest  law  and  forest  crime,  in  particular  illegal
logging, associated illegal trade and corruption, and their negative effects on the rule of law ;

Develop mechanisms for effective exchange of experience and information;

Undertake actions, including co-operation among the law enforcement authorities within and among
countries, to prevent the movement of illegal timber;

Explore ways in which the export and import of illegally harvested timber can be eliminated, including
the possibility of a prior notification system for commercially traded timber;

31

Help raise awareness, through the media and other means, of forest crimes and the threats which forest
destruction poses to our future environmental, economic and social well-being;

Improve forest-related governance in our countries in order to enforce forest law, inter alia to better
enforce property rights and promote the independence of the judiciary;

Involve stakeholders, including local communities, in decision-making in the forestry sector, thereby
promoting transparency, reducing the potential for corruption, ensuring greater equity, and minimising
the undue influence of privileged groups;

Improve  economic  opportunities  for  those  relying  on  forest  resources  to  reduce  the  incentives  for
illegal  logging  and  indiscriminate  forest  conversion,  in  order  to  contribute  to  sustainable  forest
management;

Review existing domestic forest policy frameworks and institute appropriate policy reforms, including
those  relating  to  granting  and  monitoring  concessions,  subsidies,  and  excess  processing  capacity,  to
prevent illegal practices;

Give priority to the most vulnerable transboundary areas, which require co-ordinated and responsible
action;

Develop and expand at all appropriate levels work on monitoring and assessment of forest resources;

Undertake the demarcation, accurate and timely mapping, and precise allocation of forest areas, and
make this information available to the public;

Strengthen  the  capacity  within  and  among  governments,  private  sector  and  civil  society  to  prevent,
detect and suppress forest crime.

Further,  in  order  to  give  full  effect  to  the  intentions  of  this  Declaration,  and  to  proceed  with
urgency to explore timely implementation of significant indicative actions developed by technical
experts at this meeting, we:

Undertake  to  create a  regional  task  force  on forest law  enforcement  and  governance  to  advance  the
objectives of this Declaration;

Invite  the  representatives  at  this  conference  from  NGOs,  industry,  civil  society  and  other  relevant
stakeholders to consider forming an advisory group to the regional taskforce;

Decide to meet again at the Ministerial level in 2003 to review progress on first actions to implement
these commitments, in co-operation with relevant international partners;

Request the ASEAN and APEC countries participating in this Conference to inform the next ASEAN
and APEC Summits of the outcome of this Ministerial Conference and to invite their support;

Pledge to work to see that the issue of forest crime is given significant attention in future international
fora,  including  by  the  World  Summit  on  Sustainable  Development  (WSSD)  and  the  United  Nations
Forum on Forests, and by the member organisations of the Collaborative Partnership on Forests;

Request the G-8 countries and other donors to consider further how they can join in the fight against
forest crime, including through capacity building efforts;

Encourage other regions to consider creating similar regional initiatives to combat forest crime.

Bali, Indonesia

13 September 2001

32