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1 每 15th November 2015

Report from Europe  

 EU auditors* critique of FLEGT
According to an assessment by the European Court of
Auditors (the Court) published in October, the EU FLEGT
action plan to tackle the problem of illegal logging is not
sufficiently well managed, designed and targeted.

The special report ※EU support to timber‑producing
countries under the FLEGT action plan§ criticises both the
implementation of the EU Timber Regulation (EUTR) and
the FLEGT Voluntary Partnership Agreement (VPA)

While the Court acknowledges the European Commission
(EC) ※conceived the FLEGT action plan in an innovative
way and identified possible measures to be taken§ by
addressing both supply and demand side issues of illegal
logging and related trade, it also identifies shortcomings in

According to the Court, the EC ※did not devise an
appropriate work plan with clear objectives, milestones
and a dedicated budget§.

Danger of ※FLEGT fatigue※
The Court finds it particularly problematic that, although it
has been 12 years since the action plan was presented and
despite FLEGT-related financial support to timberproducing
countries of around €300 million between 2003
and 2013, there is still no FLEGT licensing system in
operation 每 and several target dates for the introduction
have not been met.

As a result, the court highlights a ※danger of &FLEGT
fatigue* setting in, as countries become frustrated with the
lack of progress and are able to find other less stringent
markets for their products§.

Following the adoption of the Action Plan, the EC and
member states drew up a list of priority countries to target
for participation in the FLEGT licensing scheme.
However, it was also agreed that the EU ※should remain
open to trade negotiations with all countries that expressed
an interest§.

As a result, practically all interested countries 每 currently
26 每 have become involved in the process to some extent
and, according to the Court, ※the limited financial and
technical support has been spread over a large number of
countries, some of which were not the key ones for
tackling illegal logging or were most unlikely to develop
the level of governance necessary to arrive at a licensing
system in the short to medium term. This diluted the

In this context, the Court particularly criticised high levels
of funding for Liberia and the Central African Republic
(CAR) on the grounds that they are minor timber suppliers
to the EU market and are not expected to develop a
functioning FLEGT-licensing system in the foreseeable

This is contrasted with Ivory Coast, which delivers timber
worth about €166 million per year to the EU (roughly
seven times as much as Liberia and CAR combined)
which has not so far received any financial assistance in
connection with VPA.

Moreover, the Court observes that the EC had early
identified important producing, processing and trading
countries like China, Russia, India, South Korea and
Japan, as crucial for the implementation of FLEGT
objectives. However, these countries are currently not
pursuing a VPA and, according to the Court, bilateral
policy dialogue with them has produced limited results.

The Court also found that ※projects aimed at strengthening
the capacity of public authorities were not effective§ and
the main projects examined were problematic. In
Cameroon and Indonesia, for example, the financially
most significant projects did not bring the desired results 每
which were to establish a timber tracking system and to
improve forest law enforcement and governance,

The main problems identified affecting the achievement of
project objectives were ※insufficient assessment of project
risks and constraints, improper design, weak project
management and monitoring, and coordination problems
between project partners§.

The Court was critical of alleged delays in implementation
of EUTR, noting that it is still not fully implemented in
certain member countries 每 such as Spain, Greece,
Romania and Hungary.

The Court commented that: ※An earlier adoption of the
Regulation would have passed on a clear message, in the
initial stages of the action plan, that the EU was taking the
lead in the fight against illegal timber exports. This would
also have acted as an additional incentive to countries
wishing to participate in the VPA process§.

FLEGT strengthens civil society
More positively, the Court noted that FLEGT had
contributed significantly to strengthening of civil society
organisations and improved transparency in the forestry
sector of VPA partner countries.

In Cameroon, for example, civil society organisations have
been recognised as legitimate partners by the government
since the signing of the VPA agreement. As a result, ※local
and international NGOs now have the possibility to
influence the country*s forestry policy§.

The Court also took a closer look at the six VPA partner
countries that are currently in the implementation stage of
the process. It confirmed earlier reports and assessments
that Indonesia and Ghana have made significant progress
and are aiming to have their systems ready for licensing in
the near future.

However, according to the Court, there has been less
progress in other VPA partner countries. Cameroon is
struggling with the complexity of its forestry law. The
country was supposed to start issuing FLEGT licenses in
2015, according to the schedule set in the VPA.

However, neither the timber tracking system, which is
now being developed in a second attempt by the German
development aid agency Deutsche Gesellschaft f邦r
Internationale Zusammenarbeit, nor the timber-licensing
scheme are yet in place.

The Court concludes that in Cameroon ※many challenges
are thus to be overcome before full FLEGT licensing can
be achieved§.

Progress in Congo has been slow since the VPA was
ratified in May 2010, according to the Court, mainly due
to governance issues. Liberia, too, is still struggling with
illegal logging, an abuse of private use permits and weak
capacity of the forest administration services. And in CAR
the civil war ※has stalled all government action. Many
areas of the country lie outside the control of the forest
administration services, thus hampering the VPA
implementation process§.

Of the nine countries currently negotiating a VPA with the
EU, the report highlighted activities in Malaysia. The
country was one of the first to pursue a VPA but
negotiations have not yet been completed due to
※difficulties of applying a VPA throughout the whole
country and in Sarawak in particular§.

However, Malaysia makes, in the absence of a VPA,
※extensive use of public and private certification

Insufficient use of possible synergies between FLEGT and
private certification schemes was another issue identified
by the Court. Private certification schemes have helped fill
※the void created by the absence of FLEGT licensing§.

According to the Court, they contribute significantly to
meeting the due diligence requirements of the EUTR. And
they could also be more widely recognised as a part of the
VPA licensing process.

Recommendations for improvement
The EC and others connected with the action plan can take
comfort from the fact that the Court at no point suggests
that the EU should reduce support for the process. Instead
it recommends various actions to strengthen
implementation and better target resources.

The Court encourages the EC to draw up a work plan for
all components of the FLEGT action plan for the period
2016-2020. The plan should set out ※clear and specific
objectives, priorities, deadlines and a budget for EU
support in timber-producing countries§.

The objectives should be set realistically and ※take into
account the capacities of countries and their specific

Moreover, the EC should urgently insist on the
implementation of the EUTR in all Member States. And it
should also consider making more use of reputable private
certification schemes.

The EC should also take steps to ensure resources are
more clearly allocated ※where they are likely to have the
greatest impact in tackling illegal logging and related
trade§. In countries that are unlikely to reach the standards
required by a VPA in the foreseeable future, the EC should
focus on supporting forest governance ※without
necessarily signing a VPA§.

The Court recommends that the Commission evaluate the
FLEGT process more often and produce a progress report
every two years, which should include ※an assessment of
VPA implementation, scheduled deadlines, difficulties
encountered and measures taken or planned§.

The EC has yet to publish a full response to the Court*s
conclusion. However the BBC, quoting an EC
representative, reports that the EC is disputing some of the
findings and that they "will pursue its efforts to improve
efficiency, effectiveness and economy".

The EC ※recognises the need to develop more specific
objectives, milestones and a common roadmap", according
to the BBC article.

NGO defence of FLEGT Action Plan
While the EC has yet to respond formally, there has been a
vigorous defence of the FLEGT action plan by European
civil society since publication of the Court*s report.

Saskia Ozinga of FERN, an organisation which coordinates
NGO campaigning activity on forestry at EU
level, commented that: ※while progress in some countries
has been painfully slow, the FLEGT action plan remains
the EU's most effective policy on tropical forests to date§.

Ms Ozinga observes that: "the auditors have looked at
FLEGT as one simple programme with one simple aim
[i.e. FLEGT licensing], when in fact the situation in
different timber-producing countries varies greatly.

The first VPAs were only signed four years ago, so to
expect deep-seated, fundamental governance changes in
such a short time is unrealistic. The auditors appear to be
underestimating the enormity of this task."

The fact that an influential NGO was so quick to defend
the FLEGT action plan seems significant given a clear
intent of the plan is to improve market acceptance of legal
and sustainable tropical timber in the EU.

There is now a strand of opinion running through the
European environmental movement that the legal timber
trade is part of the solution, rather than part of the
problem, to serious forest problems like illegal logging
and deforestation.

This is contrary to the situation that prevailed when the
action plan was launched 12 years ago when the focus was
still more on tropical timber bans and boycotts.

Giving civil society a central place in the action plan and
VPAs has been a significant factor encouraging this
change of attitude.

It*s also notable that European media commentary of the
Court*s conclusions 每 rather than simply regurgitating
platitudes about the alleged destructive effects of timber
harvesting 每 has drawn attention to broader issues of
tropical forest management.

For example, The Parliament, a political magazine, quotes
European MEP Paul Brannen who said the report is "welltimed.
Not only can it hopefully influence the revision of
FLEGT due early next year, it also comes just before
world leaders start to arrive in Paris for the global climate

A particularly notable development since the FLEGT
Action Plan was agreed in 2003 is that the main driver of
illegal logging has changed. The reason why trees are cut
down in developing countries these days is to make space
for agriculture, mostly soy plantations and grasslands
populated by cattle to feed Europe's growing appetite for
beef. Newly-revised FLEGT must take this game-changer
into account".

Overall the signs are that the EU wants to remain heavily
engaged in tropical forest issues. But, following a deep
recession and significant decline in imports of tropical
timber products, it now has to look hard at ways to
sharpen tools to increase the efficiency and effectiveness
of policy engagement.


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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