The FAO-EU Forest Law Enforcement, Governance and Trade Programme has released over a quarter of a million dollars to finance stake holder communication on Vietnam’s FLEGT Voluntary Partnership Agreement (VPA) Timber Legality Assurance System.
Contribution from the EU FLEGT Facility: A new website developed by the EU FLEGT Facility provides timber traders, specifiers, architects and retailers with information on business benefits of trading in FLEGT-licensed timber. It also demonstrates social, environmental and economic benefits that such trade brings to producer countries.
Vietnam’s role as a wood processing hub continued to rise during 2017. Vietnam is increasingly recognised as the primary location in South East Asia for supply of mid-range interior furniture and has become a major competitor to China in this sector. Vietnam’s imports of wood products are rising to supply the export-oriented furniture manufacturing sector as well as rising domestic demand.
In the last 2 years, the level of trade between VPA partners and the EU has varied widely depending on the individual country and product. EU imports from Indonesia, currently the only FLEGT licensing country, have remained level at an annual average of €800 million since the start of 2016. This contrasts with imports from the five VPA implementing countries in Africa which declined continuously from an average annual level of €430 million at the start of 2017 to €330 million in March 2018.
A workshop reviewing purchase dynamics for companies sourcing from Indonesia identified “lack of awareness” as the key challenge for FLEGT licensing in the marketplace. The workshop formed part of the IMM Trade Consultation in Nantes and participants came from both French and Indonesian private sectors. It produced interesting insights; however given the limited number of participants the results cannot be considered representative.
Among key factors in the decline in the European market for tropical timber identified by breakout group participants focusing on the topic at the IMM Trade Consultation in Nantes was the 2008 financial crisis, which forced changes in supply in Africa particularly and led to rationalisation of the sector.
The new Fair&Precious promotion programme effectively encapsulates the work of the International Tropical Timber Technical Association (ATIBT), supporting the tropical sector’s technical, environmental and economic performance, into a producer- and market-facing branding campaign.
Barcelona Workshop 3. Progress in African VPA implementation & Challenges facing EU companies in Africa
Ghana is at final joint assessment stage of its FLEGT Voluntary Partnership Agreement and keen to promote its achievement, what it means on the ground and to counter ‘myths’ about the value of FLEGT. That was the message from Chris Beeko (pictured left) of the Ghana Forestry Commission, opening Workshop 3 of the Trade Consultation, which focused on FLEGT implementation progress in Africa and the experience of EU producers operating on the continent.
Like all manufacturing and construction materials and products, timber has to meet customer and specifier criteria on price, quality, performance and availability. But arguably more than most competing materials, it also has increasingly to satisfy procurement policy requirements on proof of legality and sustainability.
The opening workshop of the Barcelona consultation gave delegates the chance to discuss the state and outlook for FLEGT licensed timber; the challenges and opportunities, market constraints and how to tackle them. Titled “Trends in demand for VPA partner timber – Background, Reasons and Solutions”, the context for discussion was set by IMM Trade Analyst Rupert Oliver. He provided a statistical snapshot of the international market for timber from VPA partner and competing countries, with a particular focus on exports to the EU.
The EU IMM Barcelona Trade Consultation gave voice to a range of Spanish trade opinion on prospects for VPA partner timber and market requirements for legality and sustainability assurance.
IMM has published a new scoping study on forest sector investment in VPA implementing (including Viet Nam and Honduras) and FLEGT-licensing VPA partner countries. The study is intended to provide a baseline for monitoring potential impacts of FLEGT VPA implementation and FLEGT-licensing on investment decisions in the forest and timber sector.
Forest sector investments are realized by a diverse set of investors. They all have the common aim to generate returns from economic activities related to forest management and wood processing. The underlying assumption of the study is that implementation of FLEGT VPAs attracts legal and sustainable forest sector investments, while reducing informal and illegal economic activities in the sector.
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