National and international efforts to ensure a legal and sustainable global timber trade, including the EU FLEGT initiative, should engage more with micro and small to medium-sized businesses (SMEs). That’s the conclusion of a briefing paper from the Global Timber Forum (GTF) – Enhancing the Development of a Responsible SME Forest Products Sector: Recommendations and Call to Action for National and International Policies and Programmes.
The GTF is a not-for-profit operation focused on ‘building the responsible trade capabilities of forest and wood-based organisations’.
It maintains that SMEs are the ‘backbone’ of the forest products industry worldwide, accounting for 50% of global employment in the sector. So their involvement is essential to ‘drive market norms that value and demand responsibly produced timber’.
Establishing these norms, in turn, is key if the international market is to move successfully to a lower environmental impact bioeconomic model, where greater emphasis is placed on use of renewable natural resources.
“SMEs play a vital role in building a thriving and responsible forest and wood-based products sector that contributes to entrepreneurship, economic growth, innovation and job creation, while having the potential to address illegal logging and deforestation driven by land conversion,” says the GTF.
Currently, it adds, a range of challenges restrict SMEs’ ability to play their part in and benefit from development of a responsible timber trade:
- Lackof access to [legally] verified wood
- Lack of support to develop understanding of and compliance with government policy
- Lack of understanding of international market requirements
- Lack of finance to support investment and innovation
- And lack of marketing knowledge.
The importance of getting SMEs on board with strategies to ensure a responsible, legal forest and timber trade has been recognised by the EU in connection with the FLEGT initiative, says the briefing paper.
It quotes the EU’s 2016 evaluation of the EU FLEGT Action Plan as saying that, due to their lack of involvement, ‘many SMEs are or risk being negatively affected by implementation of FLEGT Voluntary Partnership Agreements’. What was needed was ‘stronger private sector involvement and simplification of procedures to comply with VPA/EUTR requirements in order to increase cost-effectiveness for forest businesses’.
The GTF also cites the EU FLEGT Facility’s 2018 Highlights and Insights reports. This stated that ‘SMEs are are a major force in the forest sectors of many timber exporting countries involved in FLEGT processes’. But it acknowledged that ‘as VPA processes lead more countries to clarify their legal frameworks, increase law enforcement and change policy, smaller-scale entities could be vulnerable if their needs and challenges are not well understood. More work needed to be done to understand this group of actors so that practical solutions could be developed to help integrate them into verifiably legal supply chains.
The GTF also maintains that SMEs are largely excluded from major national and international deforestation focused forums. “They’re voices are drowned out by larger operators who have different priorities,” it says.