Evaluation of the Myanmar Coc Dossier and MTLAS

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Evaluation of the Myanmar Coc Dossier and MTLAS Evaluation of the Myanmar CoC Dossier and MTLAS By Christian Sloth and Kyaw Htun 19 February 2020 Report developed on behalf of European Timber Trade Federation Blank page 2 Contents Contents .............................................................................................................. 3 Acronyms ............................................................................................................. 4 Acknowledgements ................................................................................................ 5 1 Introduction .................................................................................................... 6 1.1 About this report........................................................................................... 6 2 Background .................................................................................................... 9 2.1 Forest governance and legality – a perspective on current situation .................... 9 2.2 Forest resources ......................................................................................... 10 2.3 Forest management and harvesting .............................................................. 14 2.3 Timber trade .............................................................................................. 20 2.4 Applicable forest laws and regulations ........................................................... 24 2.5 Timber sources in Myanmar ......................................................................... 28 2.6 Timber tracking .......................................................................................... 32 3 Evaluation of MTLAS ...................................................................................... 34 3.1 The role of MFCC ........................................................................................ 35 3.2 MTLAS documented procedures .................................................................... 35 3.3 The MTLAS standard ................................................................................... 37 3.4 MTLAS as a legality assurance system (quality management) ........................... 38 4 The CoC Dossier ............................................................................................ 43 4.1 Structure of the CoC Dossier ........................................................................ 43 4.2 Assessment of the applicability of the documents in the supply chain ................ 48 5 Overview of observations ................................................................................ 50 6 Conclusions and recommendations for MFCC ..................................................... 56 7 Conclusions and recommendations for EU Operators .......................................... 57 References ......................................................................................................... 63 Annex 1: Evaluation of MFCC activities to close gaps from 2017 gap analysis ............. 66 Annex 2: NEPCon evaluation of cerification systems: MTLAS ..................................... 77 Annex 3: Field trip report ..................................................................................... 96 Annex 4: Myanmar species groups ....................................................................... 100 3 Acronyms AAC: Annual Allowable Cut ADB: Asian Development Bank CoC: Chain of Custody DBH: Diameter at Breast Height DFID: UK Department for International Development DI: Departmental Instructions EC: European Commission ETTF: European Timber Trade Federation EU: European Union EUTR: European Union Timber Regulation FD: Forest Department FLEGT: Forest Law, Enforcement, Governance and Trade FME: Forest Management Enterprise FMU: Forest Management Unit FSC: Forest Stewardship Council GBH: Girth at Breast Height HT: Hoppus Ton (corresponds to 1.8027 cubic meters) IAF: International Accreditation Forum MFCC: Myanmar Forest Certification Committee MONREC: Ministry of Natural Resources and Environmental Conservation MTE: Myanmar Timber Enterprise MTLAS: Myanmar Timber Legality Assurance System NGO: Non-Governmental Organisation P&C: Principles and Criteria RIL: Reduced Impact Logging SOS Standing Orders for Extraction Staff TLAS: Timber Legality Assurance System UN: United Nations VFVL: Vacant, Fallow and Virgin Lands VPA: Voluntary Partnership Agreement 4 Acknowledgements NEPCon, first and foremost, would like to express our appreciation to the Ministry of Natural Resources and Environmental Conservation (MONREC) for permitting an evaluation trip to Gangaw Township, Magway Region, and to the Myanmar Timber Enterprise (MTE) and the Forest Department (FD) for making the evaluation trip possible. We are very grateful to the Food and Agriculture Organization (FAO) of the United Nations and its staff for organizing the evaluation trip and providing valuable accompaniment throughout it. Special thanks go to the Manager and staff of Gangaw Extraction Agency and to the Assistant Director and staff of Gangaw Forest District for making excellent logistics arrangements and complete field inspections. Discussions and tireless explanations regarding field procedures and forms used in timber extraction during the evaluation trip were invaluable. We sincerely thank the Multi-Stakeholder Group (MSG) members from the Private Sector and Civil Society Organizations (CSOs), and the representative from Myanmar Forest Certification Committee (MFCC), for their active and dynamic participation in constructive dialogues. Their observations and suggestions during the evaluation trip are really appreciated. 5 1 Introduction The Myanmar Government, through the Myanmar Forest Certification Committee (MFCC), have implemented actions to provide transparency of the timber supply chain in Myanmar, specifically to provide traceability and access to legally required documents for timber exported to the European Union. Among these activities are the development of the Myanmar Timber Legality Assurance System (MTLAS) and the publication of the CoC Dossier. The MTLAS was developed in 2013 based on the Association of Southeast Asian Nations (ASEAN) Criteria and Indicators for Legality of Timber. It is currently being used as a means for verifying the legality of timber exports from Myanmar. The MTLAS includes a definition of legal timber and six associated Principles and 15 Criteria. It specifies relevant laws and regulations, as well as the means for verifying that specific indicators are met. Currently, the MTLAS is functioning as a voluntary certification system, but the intention is to develop the system into a mandated regulatory system that all timber for export shall be certified against. The MTLAS standard and related documents can be downloaded here: https://www.myanmarforestcertification.org/standards/ The Chain of Custody (CoC) Dossier was endorsed by the Interim Task Force (ITF)/Multi- stakeholder Group (MSG) and approved by the Ministry of Natural Resources and Environmental Conservation (MONREC) in March 2018 and in May 2018, respectively. The ITF and MSG were created during the VPA preparatory phase and the MSG is expected to continue playing a role in guiding the development of roadmap for activities related to timber legality verification. The Dossier was developed as a response to the EU Timber Regulation (EUTR) and as a start of a potential FLEGT VPA process, to help EU importers (operators) understand the steps in the supply chain, including responsibilities of the different authorities involved and the documents that provide evidence that each step has been carried out. Because it provides details on different steps in the process, including a description and translation of each document, it is considered an important tool for operators (international buyers) commissioning 3rd party verification as part of their risk mitigation measures that may conduct independent third-party verification of the legality of exported timber products. The Dossier can be downloaded here: https://www.forestdepartment.gov.mm/sites/default/files/Documents/%28R%29Myanm ar%20Timber%20Chain%20of%20Custody%20Process.pdf Currently the MTLAS and the CoC Dossier are not directly linked, even if there is a great deal of overlap in the objectives of the two. 1.1 About this report The current report contains the findings of an evaluation conducted by NEPCon on behalf of the European Timber Trade Federation (ETTF). The purpose of the evaluation is to evaluate the extent to which the CoC Dossier and the MTLAS can be used to meet EUTR requirements for verifying origin and species and to indicate the legality of the timber imported from Myanmar. The report outlines how the documents listed in the Dossier can be used by operators as evidence that they have access to sufficient information about the origin of material and indications of legality to enable an efficient due diligence exercise on the material. This 6 report also includes an evaluation of how the FD and MTE controls, described in the CoC dossier, is being implemented on the ground by relevant authorities. The evaluation described herein also include an assessment of the robustness of the Myanmar Forest Certification Committee’s (MFCC) current 3rd party audit/certification services as implemented under the Myanmar Timber Legality Assurance System (MTLAS). It is noted that the evaluation of the MTLAS was done based on the available documented procedures and review of one audit report, but that no evaluation of actual audit activities was possible.
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