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Accurate and timely information on timber trade flows is crucial to understanding market developments, including the impact and effectiveness of FLEGT policy measures. The ability to access trade data in near real-time has taken on even greater significance during the period of unprecedented global disruption caused by COVID-19. At a webinar on 20 October, the FLEGT Independent Market Monitor (IMM) will introduce two new, innovative and freely accessible online sources of trade data - the IMM's own Data Dashboard and the Sustainable Timber Information Exchange (STIX). 

The IMM 2017 survey serves as a baseline for EU trade perceptions of the Indonesian FLEGT-licensing system and day-to-day management of importing Licensed timber. Repetition of the same questions in 2018 and 2019 now allows for comparison over time. Chart 1 shows a sharp and constant rise of the proportion of respondents finding the administrative process of importing FLEGT-licensed timber easily understandable and manageable over the last three years. The number of respondents highlighting challenges continued to fall in 2019, after declining sharply in 2018.

The IMM 2017-2019 EU Trade Surveys recorded no significant changes in the overall level of awareness of the FLEGT VPA process (chart 1) among respondents over the last three years. The number of companies claiming to be “fully aware” of the process dropped by 17 percentage points in 2018, with some companies stating that they only realised that they had not fully understood the process after beginning to hear more about it. At the same time, the number of companies claiming to the be “totally unaware” of the process had risen as well. However, this was believed by IMM correspondents to have mainly been expressions of frustration with the duration of the process, which resurfaced in 2018, after initial euphoria over Indonesia achieving the Licensing stage in late 2016. In 2019, the number of “fully aware” companies increased again slightly, while the number of “totally unaware” companies fell. 

The question of where FLEGT stands in relation to voluntary third-party certification is frequently raised in discussions during IMM Trade Consultations and in interviews conducted as a part of IMM surveys. Is the FLEGT VPA process “a step backwards” because it focuses on demonstrating compliance to national forest laws rather than to international “sustainable forestry” principles that are the basis for forest certification systems? Or is the FLEGT process “better” than voluntary certification, because it is mandatory, better placed to achieve a broad national stakeholder consensus on forest management standards integrated with national regulatory and fiscal frameworks, and helps to ensure equitable access for all forest operators? 

The FSC Controlled Wood System was first introduced in 2004 alongside introduction of the FSC Mix label which allows, under controlled conditions, the mixing of FSC certified material with uncertified material in FSC labelled products. The non-certified portion must comply with the FSC Controlled Wood standards which enable manufacturers and traders to avoid timber and timber products from unacceptable sources. The Controlled Wood requirements are an integral part of FSC chain of custody (CoC) certification which, at the end of 2018, applied to 40,000 operators worldwide, including nearly 20,000 in the EU. 

The IMM 2018 trade survey analysed whether there were any perceived direct impacts from the introduction of FLEGT-licensing and the EUTR on imports of timber certified by private certification and legality verification schemes. Figure 1 shows that, according to respondents, private schemes, especially FSC, have profited to some degree from the introduction of EUTR. Several respondents remarked that, since EUTR was introduced, they have tended to prefer certified timber from countries where the risk of illegal harvest is considered non-negligible and certification is used as the principle mechanism to mitigate this risk.

Overall progress of third-party certification under the FSC and PEFC frameworks in VPA partner countries was slow before efforts to develop FLEGT licensing systems began and, in most countries, progress has remained slow during the period of TLAS implementation. Total FSC and PEFC certified area in all VPA Partner countries was 17.5 million hectares in 2018, up from 11.62 million hectares in 2012 and less than 3 million hectares in 2007. While the rate of increase is impressive, in 2018 less than 4% of total forest area in VPA partner countries was certified and around 80% of the certified area was in just two of the 15 countries, Indonesia (38%) and Malaysia (42%). 

IMM’s latest Annual Report, “FLEGT VPA Partners in EU Timber Trade 2018”, shows that the combined share of the VPA partner countries in global tropical wood products trade (all products in HS 44 and wood furniture products in HS 94) was 78.8% in 2018, slightly down from 78.9% in 2017 and 79.4% in 2016. This trend is set in the context of an 8% rise in global tropical wood products trade in 2018, to US$39.8 billion.

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.