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Timber Legality Risk Assessment Romania

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Timber Legality Risk Assessment Romania Timber Legality Risk Assessment Romania November 2016 Supporting Legal Timber Trade This risk assessment has been developed with support from the EU LIFE Programme, UK Aid from the UK Government and FSCTM. Donors and FSC are not responsible for any claims or views presented in this material. This Risk Assessment has been produced for educational and informational purposes only. NEPCon is not liable for any reliance placed on this document, or any financial or other loss caused as a result of reliance on information contained herein. The information contained in the country profile is accurate, to the best of NEPCon’s knowledge, as of the publication date. The European Commission’s support for the production of this publication does not constitute endorsement of the contents which reflect the views only of the authors and the Commission cannot be held responsible for any use that may be made of the information contained herein. This material has been funded by UK Aid from the UK Government; the views expressed, however, do not necessarily reflect the UK Government’s official policies. Contents A. Introduction ................................................................................................................................... 1 B. Overview of Legality risks ............................................................................................................... 3 C. Overview of the forest sector in Romania ........................................................................................ 5 D. Timber source types ....................................................................................................................... 7 E. Legality Risk Assessment ............................................................................................................... 11 LEGAL RIGHTS TO HARVEST ......................................................................................................................... 11 1.1. Land tenure and management rights ............................................................................................... 11 1.2. Concession licenses ........................................................................................................................... 14 1.3. Management and harvesting planning ............................................................................................ 16 1.4. Harvesting permits ........................................................................................................................... 18 TAXES AND FEES .......................................................................................................................................... 25 1.5. Payment of royalties and harvesting fees ........................................................................................ 25 1.6. Value added taxes and other sales taxes ......................................................................................... 26 1.7. Income and profit taxes .................................................................................................................... 28 TIMBER HARVESTING ACTIVITIES ................................................................................................................ 30 1.8. Timber harvesting regulations .......................................................................................................... 30 1.9. Protected sites and species ............................................................................................................... 32 1.10. Environmental requirements .......................................................................................................... 35 1.11. Health and safety ............................................................................................................................ 37 1.12. Legal employment .......................................................................................................................... 40 THIRD PARTIES’ RIGHTS ............................................................................................................................... 42 1.13 Customary rights ............................................................................................................................. 42 1.14. Free prior and informed consent .................................................................................................... 43 1.15. Indigenous/traditional peoples’ rights ........................................................................................... 43 TRADE AND TRANSPORT ............................................................................................................................. 44 1.16. Classification of species, quantities, qualities ................................................................................. 44 1.17. Trade and transport ........................................................................................................................ 47 1.18. Offshore trading and transfer pricing ............................................................................................. 50 1.19. Custom regulations ......................................................................................................................... 51 1.20. CITES ............................................................................................................................................... 53 1.21. Legislation requiring due diligence/due care procedures ............................................................... 54 F. Expert Consultation ...................................................................................................................... 57 This page has been left intentionally blank A. Introduction This Timber Legality Risk Assessment for Romania provides an analysis of the risk of sourcing timber from areas of illegal harvesting and transport. NEPCon has been working on risk assessments for timber legality, in partnership with a number of organisations, since 2007. In that time, NEPCon has developed timber risk assessments for more than 60 countries, illustrated in Figure 1. Figure 1. Countries for which NEPCon have developed a legality risk assessment for timber The risk assessments are developed in collaboration with local forest legality experts and use an assessment methodology jointly developed by FSC and NEPCon. A detailed description of the methodology can be found on NEPCon’s website.1 1 Commodity Risk Assessment Methodology, available at www.nepcon.org/cri 1 Timber Legality Risk Assessment – Romania 2 Timber Risk Profile – Romania B. Overview of Legality risks The key legality risks identified in this report relate to: Legal rights to harvest: There is a known risk to the sub-category 1.4 Harvesting permits: The risk related to harvesting permits originates in the issuing procedures and in the difficulty of controlling the decision system behind establishing the types of cuts, the drafting of volume estimation documents and the monitoring of the chain of custody through the wood tracking application. There is a risk of illegal logged volume introduced to the chain of custody due to ownership fragmentation, insufficient marking of property boundaries in the field and lack of administration contracts for every forest area. Timber harvesting activities: There is a known risk for Timber harvesting regulations (1.8), related to harvesting firms being authorised without their claims regarding equipment, machinery and sufficiently trained staff being verified. The procedure for authorisation is time consuming and delays the start of the forest harvesting process, which can prolong harvesting beyond the permitted period and force firms to resume the harvest in the next winter. For Protected sites and species (1.9) there is a risk of protected areas without a valid management plan. During the development of management plans for protected areas there is the risk of insufficient stakeholder consultation. There is a risk of illegal logging in protected areas. Regarding Environmental requirements (1.10), there is a risk of unconformities related to forest harvesting, referring to skidding trails, damage to remaining trees and water protection. Forest harvests without an environmental permit or ministerial decision were encountered. Health and safety (1.11) procedures are not properly implemented in the field, casual labour is a common phenomenon in Romania. This is related to the risk for Legal employment (1.12), the length of employment is very short in the forestry sector. Many employees prefer not to contract workers with employment contracts. Trade and transport: There is a known risk for Classification of species, quantities, qualities (1.16.), a risk of difference in the estimated volume of wood is identified, which can be transmitted throughout the chain of custody. Any underestimates in the diameter or heights measured in the field can be transmitted throughout the chain of custody, especially if the WOOD Tracking system is not applied properly. An identified risk for Trade and transport (1.17) is the weakness of the WOOD Tracking system. As there is no cross-checking between the volumes of assortments in the Volume Estimation Document and the volumes from the harvesting results, there is a certain risk that that firewood from a certain harvesting site is sold on the local market (with very short transportation distances and low risk of being identified by transport control) and be introduced
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