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1 每 15th April 2015

Report from Europe  

  More positive attitudes to tropical timber in Europe
The first quarter of 2015 has been a busy time for EU
policy initiatives linked to tropical forest and market
development programs for tropical timber. There seems
now not only to be a new urgency surrounding these
initiatives but also a growing pragmatism with potentially
positive implications for the tropical timber industry.

Specifically, there is a growing realisation that the EU can
achieve very little by demanding that tropical timber
products meet unrealistic standards of forest certification.

In order to avoid becoming irrelevant in issues
surrounding tropical forests, the focus appears to be
heading towards building constructive partnerships with
tropical countries and on ensuring demands for ※legal and
sustainable§ timber is balanced by positive promotion of

This new and more positive attitude was in evidence at
two high profile and well attended meetings focused on
tropical forestry issues hosted in the EU during the first
quarter of 2015.

In February, the second annual conference of the
Sustainable Tropical Timber Coalition (STTC) in
Valencia, Spain, attracted 70 delegates, a large proportion
of which were from the trade and industry.

In March, FLEGT Week was held in Brussels, an event
which attracted over 300 invited delegates representing a
wide spectrum of interests including private sector,
governments and civil society from about 40 timber
producing and consuming countries.

Again, and unlike previous years, there was significant
participation from trade and industry, the African
contingent being particularly well represented.

Two other European-based trade associations also deserve
credit for promoting this more positive and pragmatic
approach to tropical timber issues in the EU.

The European Timber Trade Federation (ETTF) is
becoming more active and vocal in its support for tropical
timbers 每 well illustrated by the quarterly ETTF newsletter
now being published quarterly and freely available (see for the
latest copy).

The Association Technique Internationale des Bois
Tropicaux (ATIBT) based in Paris is also busy
transforming itself into an international organisation with a
stronger focus on accelerating recovery in the tropical
timber sector in Europe and wider international market
place. The ATIBT‟s latest newsletter (currently in French
only) is available from

Practical experience of EUTR and VPAs
While these organisations are playing a role, perhaps a
more important reason for the EU‟s ※new pragmatism§ in
tropical timber issues is practical experience of
implementing the EU Timber Regulation (EUTR) and the
FLEGT Voluntary Partnership Agreements (VPAs).

This seems now to be raising awareness amongst
European policy makers of the real challenges of forest
governance reform in tropical timber countries, the
considerable efforts being undertaken to overcome these,
and the sheer complexities of the tropical timber trade.

The quality of information on Europe‟s role in the tropical
timber industry is also improving. This information is
being acquired through a variety of projects now
underway aimed at reviewing the impact of the EU‟s
FLEGT Action Plan which is a decade old this year. One
such project 每 the FLEGT Independent Market Monitor
(IMM) 每 has been operational now for 12 months and is
being run by the ITTO.

Also underway are the first formal biennial assessment of
the EUTR and the formal 10-year Review of the FLEGT
Action Plan which looks more broadly at the full range of
EU forest governance measures, of which the VPAs are
probably the most significant.

An important output from these various monitoring
processes has been to highlight the dramatic fall in the
EU‟s share of global tropical timber trade over the last
decade. The IMM‟s Baseline Report, soon to be published
by ITTO, shows that the EU‟s share of global tropical
timber trade fell from 24% to 12% between 2004 and

During the same period, China‟s value share rose from
15% to 28% while India‟s increased from 4% to 7%.
These figures, which consider only international trade,
under-estimate the extent of the shift in trade as there has
also been considerable growth in many tropical countries'
domestic consumption in the last decade.

FLEGT*s major influence on the supply side
While trade data highlights the diminishing role of the EU
on the demand side, it also demonstrates just how
influential the FLEGT process is proving to be on the
supply side.

Data from the IMM Baseline Report, widely quoted during
FLEGT Week, shows that in 2013 the 15 countries
implementing or negotiating VPAs accounted for 75% of
the value of global tropical timber trade and 80% of the
EU's tropical timber imports.

At FLEGT Week, the EC noted that ※the level of ambition
and influence of the VPA process is even more extensive
than envisaged when the FLEGT Action plan was
launched a decade ago§. All six countries now
implementing Timber Legality Assurance Systems
(TLAS) in line with VPA commitments are extending
these procedures to all exports, not just those destined for
the EU, and also, in most cases, to domestic markets.

A strong commitment to participation, transparency and
legislative reforms is also the norm in VPA processes.
Civil society monitoring, governance reforms and
legislative clarity are other key outcomes.

There were positive reports during FLEGT Week of the
progress to finalise TLAS in line with VPA requirements
in both Indonesia and Ghana. Dr Agus Sarsito of the
Indonesian Department of Forestry told the audience that
Indonesia's SVLK system is already working well and
delivering national licenses. It just needs the EU to
confirm that these align with their expectations for FLEGT

Raphael Yeboah of the Ghanaian Forestry Commission
noted that the TLAS in Ghana is nearing completion and
FLEGT licences are "almost there". Both countries' now
expect FLEGT licences to be issued either later this year
or the first half of 2016.

Challenges of VPA implementation
Recognition of the scope of the FLEGT process and the
progress made was tempered during FLEGT Week with
concerns over the significant challenges of finalising
TLAS procedures and securing market benefits. The
extent of these challenges was particularly highlighted at a
workshop for the private sector during FLEGT Week.

In addition to noting the sharp decline in European imports
of tropical wood in the last decade, the workshop report
concludes that conversion of forest land to alternative uses
continues to increase in many countries under pressure of
population and with low economic returns from
sustainable timber production.

In place of managed selective harvesting, more timber is
coming from forest conversion and monoculture
plantations of fast growing lightwoods for the paper
industry, panels and engineered products.

The move to value-added timber industries has also stalled
in many tropical countries, particularly in Africa, as they
have struggled to compete with other timber processing
countries. Exports of logs and rough sawn lumber have
increased from many countries relative to semi-finished
and finished goods.

Low financial returns and competitiveness imply a
significant obligation on policy makers to ensure that the
new TLAS are both cost-effective and adequately
rewarded in the market place. It is a considerable
challenge to balance these demands with the equally
important need to ensure systems are robust, equitable for
the full range of timber suppliers, both large and small,
and widely recognised and endorsed by representatives of
civil society.

This balance has to be achieved in an environment where
financial and technical resources are limited, existing
institutions may be weak and resources to apply the law
are limited.

As one participant at the FLEGT Week workshop noted,
"FLEGT may be one of the smartest governance
programmes, but the process is messy, unpredictable and
taking longer than first thought."

Delay in VPA licensing 每 the challenge for the private

The long delays in implementation and issue of VPA
licenses are a significant cause of concern for the private
sector. EU importer representatives at the workshop
stressed that lack of licenses is becoming a more
significant obstacle to trade in tropical timber in the risk
averse market environment that has developed in the EU
following the economic crises and with implementation of

In his presentation to FLEGT Week, ATIBT Director
Ralph Ridder noted that, while there were many positive
developments in FLEGT over the past decade, there has
been a loss of momentum in some VPA processes. This
has made parts of the private sector sceptical about the
value of VPAs and encouraged disengagement.

Ridder emphasised that the EU must address this,
specifically by providing support for positive market
development of timber from VPA countries and a strong
focus on delivering more cost effective approaches.

Other private sector participants at FLEGT Week
emphasised the need for more stepwise approaches in
VPA countries, with intermediate benefits during the long
process of negotiation and implementation. Participants
also said that a TLAS should be built from existing
systems to maximize efficiency and minimize costs.

Linkage to existing private-sector legality verification and
certification systems should be actively encouraged.

One participant went further, calling for risk-based
approaches in the future, noting that auditing costs are
increasing and that it would be good to contain them. A
risk-based approach would mean less control in countries
where there is good governance and a culture of
compliance and increasing levels of control where there is
a systematic lack of compliance.


LM       Loyale Merchant, a grade of log parcel  Cu.m         Cubic Metre
QS        Qualite Superieure    Koku         0.278 Cu.m or 120BF
CI          Choix Industriel                                                       FFR           French Franc
CE         Choix Economique                                                        SQ              Sawmill Quality
CS         Choix Supplimentaire      SSQ            Select Sawmill Quality
FOB      Free-on-Board     FAS            Sawnwood Grade First and
KD        Kiln Dry                               Second 
AD        Air Dry        WBP           Water and Boil Proof
Boule    A Log Sawn Through and Through MR              Moisture Resistant
              the boards from one log are bundled                      pc         per piece      
              together                      ea                each      
BB/CC  Grade B faced and Grade C backed MBF           1000 Board Feet          
              Plywood   MDF           Medium Density Fibreboard
BF        Board Foot F.CFA         CFA Franc        
Sq.Ft     Square Foot              Price has moved up or down

Source:ITTO'  Tropical Timber Market Report

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