Since the early 1990s, private sector actors have been taking steps to ensure that they exclude unsustainable and illegal wood from their supply chains. Private sector procurement policies are now prominent in the global North and among companies with global reach. With time, these purchasing practices are becoming more widely integrated in corporate business practices and contained within a larger sustainability and/or corporate responsibility policy often covering several other aspects.
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.
With further support, development and communication FLEGT and FLEGT licensing can play a role in underpinning tropical timber product market share in the highly competitive European furniture sector, according to the latest IMM survey.The core aim of the IMM scoping study of procurement in the EU furniture industry is to gauge the sector’s perceptions of the value, impacts and process of sourcing from FLEGT VPA engaged supplier countries.
IMM’s Trade Consultation in Nantes was held against the backdrop and with the cooperation of the Carrefour International du Bois (CIB) timber trade show and the International Tropical Timber Technical Association (ATIBT).
The signature by the EU and Vietnam of the latter’s FLEGT Voluntary Partnership Agreement is scheduled for later this year, with ratification in 2019. They are being heralded as critical staging posts, and important moments both practically and psychologically, in the country’s progress towards full VPA implementation and its start of FLEGT licensing of timber and wood product exports to the EU.
The Joint Implementation Committee for the Indonesian VPA met on 1 March 2018 in Jakarta to review experience with the first 15 months of licensing. According to information from the Indonesian SILK database and the Licensing Information Unit (LIU), more than 39,000 FLEGT licenses were issued during 2017. This means that FLEGT-licenses accounted for 18.2% of all V-Legal documents – paperwork accompanying Indonesian exports globally and guaranteeing timber legality – issued during that period.
The FLEGT licensed information point is expanding its information for timber buyers. Recent IMM trade consultations revealed that the trade advantages of FLEGT licensed timber are relatively well-known. However, the private sector is keen to learn more about, and articulate to their clients, the social, economic and environmental benefits of FLEGT licensed timber.
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