This document provides additional information on the definitions, data sources and platform used by the FLEGT Independent Market Monitoring (IMM) project to prepare the on-line About VPA Country Reports.
The VPAs are the supply-side measures introduced as part of the EU Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan. VPAs are legally binding trade agreements between the EU and timber-exporting countries outside the EU. The purpose of a VPA is to ensure that timber and timber products exported to the EU come from legal sources. The agreements also help timber-exporting countries stop illegal logging by improving regulation and governance of the forest sector. In the IMM country reports, VPA partner countries are categorised as: “FLEGT licensing” that have signed a VPA with the EU and finalised and implemented the system needed to control, verify and license legal timber for export to the EU; “VPA implementing” that have signed a VPA and are developing but yet to fully implement the licensing system for exports to the EU; and “VPA negotiating” that have yet to sign and are still negotiating a VPA with the EU.
World Bank income classification
The World Bank income classification is based on gross national income (GNI) per person calculated using the World Bank Atlas method. The thresholds to distinguish between the income groups are adjusted for prices over time. As of 1 July 2019, low-income economies are defined as those with a GNI per capita of $1,025 or less in 2018; lower middle-income economies are those with a GNI per capita between $1,026 and $3,995; upper middle-income economies are those with a GNI per capita between $3,996 and $12,375; high-income economies are those with a GNI per capita of $12,376 or more.
The country report provides data relating to VPA Partner countries position in various international competitiveness indices. The World Bank’s Ease of Doing Business Index (EDB) ranks countries based on a quantitative analysis of factors that affect the ease of doing business. The Global Competitiveness Index (GCI) of the World Economic Forum (WEF) ranks countries using a wider range of more subjective measures, such as macroeconomic stability, health and education, labour market efficiency, and innovation. The United Nations Conference on Trade and Development (UNCTAD) publishes a range of indices which assess the degree and quality of each country’s integration with international trade networks. UNCTAD’s Connectivity Index (derived in the VPA country reports from the World Bank website) assesses the connectivity of 164 countries to international container routes by combining data on the numbers of container ships deployed, their total and per-capita carrying capacity, and the number of liner companies operating routes to each country.
Forest area and change data
Two sources of data are used to monitor trends in forest area at national and international level:
UN Food and Agriculture Organisation (FAO) which has been monitoring the world’s forests since 1946 and which now produces the Global Forest Resources Assessment (FRA) every five years. The FRA is based on reports by National Correspondents drawing on national forest inventories with supplementary information now derived from remote sensing conducted by FAO together with national focal points and regional partners. The Country Reports currently draw on data from the FAO 2015 FRA and will be updated as soon as data is published for the FAO 2020 FRA.
Global Forest Watch (GFW) which since 2014 has been providing annual updates of changes in tree cover derived from analysis of satellite imagery. The GFW analysis builds on an analysis by Hansen et al. of 650,000 Landsat images to identify gains and losses in tree cover at 30 X 30 meter resolution during the period 2001 to 2012 (Hansen et al, 2011).
Each data set uses different definitions and has strengths and weaknesses to be considered when analysing trends in forest cover and condition. In practice, the clearest insights may be derived by reviewing both sources of information.
A strength of the FAO FRA forest area and deforestation data is that it differentiates between “natural forest”, “planted forest” and “other wooded land” and specifically excludes trees established for agricultural production (e.g. fruits, saps or for other non-forest land uses) from the definition of forest. The FAO forest change data differentiates between forest conversion operations and harvesting as a part of a sustainable forestry rotation. FAO FRA also monitors key forest policy and production criteria such as growing stock volume, area according to conservation status, management planning and certification.
On the other hand, FAO FRA suffers from data inconsistencies and quality issues as individual countries undertake forest inventories at different times and frequencies, vary widely in the level of funding and technical capacity devoted to forest inventory, and have different national definitions for forest and other land uses that may be difficult to reconcile with the FAO definitions.
The main benefit of the GFW tree cover loss and gain data is that it adds transparency, consistency and regularity in assessing changes in tree cover on a global scale. However, a limitation is that GFW defines tree cover as all vegetation taller than five meters in height making no distinction between natural forests, plantations or commercial cash crops such as palm oil, cocoa and rubber.
“Tree cover loss” monitored by GFW is not equivalent to “deforestation” as defined by FAO since it measures the total loss of all trees within a specific area regardless of the cause. It includes human-driven deforestation, forest fires both natural and manmade, clearing trees for agriculture, logging, plantation harvesting, and tree mortality due to disease and other natural causes. Much of the “tree cover loss” is only temporary, as forests are re-established after harvesting or regenerate naturally after disturbances such as fire. However, in practice it is a lot easier to identify losses – which tend to be sudden – than it is to identify gains which involve slow greening over time.
The GFW tree cover loss and gain data therefore does not effectively distinguish between forests which are permanently converted and those which are temporarily cleared as part of managed forestry operations. Although Hansen et al estimated both tree cover loss and gain during the 2001 to 2012 period, GFW does not include gains in their regular annual reports due to the problems of monitoring.
Certified forest area
“Timber products”, “wood products” and “primary wood products”
In the IMM Country Reports, the term “timber products” is taken to include all products in the scope of existing or potential future VPAs, including the following chapters (and parts thereof) of the international Harmonized Commodity Description and Coding (HS) System: all products in Chapter 44 (Wood); products identified as containing wood in Chapter 94 (Furniture); virgin wood-based pulp products in Chapter 47 (Pulp); and all products in Chapter 48 (Paper).
For import and export data in the IMM Country Reports, the term “wood products” refers only to products in HS Chapter 44 (Wood) and products identified as containing wood in HS Chapter 94 (Furniture) and excludes all products in HS Chapters 47 (Pulp) and 48 (Paper).
The term “primary wood products” is used in the flow diagram and charts showing national production, imports, exports and domestic consumption in the “Trade Overview” tab where data is derived from the ITTO Biennial Review. Primary wood products are defined by ITTO to include logs (HS4403), sawnwood (HS4407), veneer (HS4408), and plywood (HS4412).
Sustainable Timber Information Exchange
Unless otherwise stated, all trade data in the IMM Country Reports is compiled from the Sustainable Timber Information Exchange (STIX). STIX is a joint initiative of the ITTO, working through the FLEGT IMM project hosted by ITTO with EC funding, and the Global Timber Forum (GTF). STIX collects, organizes, visualizes, disseminates, and exchanges data on international trade flows of timber and forest products, alongside the contextual information necessary to monitor the impact of measures to promote legal and sustainable trade.
STIX currently provides access to data on timber products trade as reported by the statistical agencies of 44 countries including nearly all the world’s largest exporters and importers. Together these countries are estimated to account for at least 90% of the total value of global timber products trade.
For EU member states, STIX draws on raw data from the Eurostat COMEXT bulk download facility. For non-EU timber trading countries, STIX sources raw data from Business and Trade Statistics Ltd, a UK-based company.
STIX compiles data for all products listed in chapters 44 (wood), 47 (pulp) and 48 (paper) and wood-based furniture in chapter 94 of the HS system. The start date for all data in the STIX database is January 2015 and the end date is the most recent monthly data published by the statistical agency of the reporting country.
All quantity data for EU countries is validated (obvious errors identified and removed) by STIX using an algorithm to ensure unit values remain within reasonable bounds.
While reporting countries outside the EU use inconsistent reporting units, STIX converts all value data into US dollars and Euros using exchange rates current at the time of the transaction. Procedures are also being developed to standardize units and to validate routines to improve the quality and consistency of quantity data for non-EU countries. The IMM Country reports will be adapted to include more quantity data alongside value data once these routines are finalised.
By compiling and harmonizing data for a significant number of reporting countries, a feature of the STIX database is that “mirror data” can be accessed for those VPA partner countries which do not themselves regularly report trade data. This is true of many developing countries that lack national capacity to regularly compile and publish trade statistics. In mirror data, import data from the full range of reporting countries is used as a proxy for export data by partner countries for which data is not available (and vice versa).
The STIX database contains trade data reported by Malaysia and Indonesia. The IMM Country Reports for these two countries is therefore comprehensive with respect to trade partners. However, for all other VPA partner countries, the IMM Country Reports use mirror data reported by the 44 countries contained in the STIX database.
It is important to emphasise that for those IMM Country Reports dependent on mirror data, reported trade is not comprehensive with respect to trade partners. For example, in some African VPA partner countries, a large and growing proportion of wood product exports are to Viet Nam and India. However, these trends are not made apparent in the IMM Country Reports because the STIX database currently does not include data reported by Viet Nam or India.
ITTO Biennial Review
The Trade Overview tab includes data in cubic meters on VPA partner production, imports, exports and domestic consumption of primary wood products. This is the most recent annual data available in the ITTO Biennial Review which is collected through the Joint Forest Sector Questionnaire, an exercise undertaken jointly by ITTO, Eurostat, the FAO Forestry Department, and the UNECE Timber Section working though the Intersecretariat Working Group on Forest Sector Statistics (IWG).
“Other regulated countries”
The Exports tab includes a chart summarising VPA partner country exports to the EU and “other regulated countries”. “Other regulated countries” are those which, like the EU through the EUTR, have introduced regulations designed to ensure illegally harvested timber products are not placed on the market. In December 2019, the following countries are identified as “other regulated countries”: Australia, Indonesia, Japan, Malaysia, Norway, Republic of Korea, United States of America, and Viet Nam. The status and scope of relevant regulations in these countries is monitored by IMM (most recent summary in Chapter 13 of the IMM 2018 Annual Report).
The IMM Country Reports are prepared using R Markdown, a file format for making dynamic documents with R. This open source platform allows reports to be readily updated whenever new data becomes available.