FLEGT Action Plan Progress Report 2003-2010

Prepared by John HUDSON and Catherine PAUL

26 January 2011

This document has been produced with the financial assistance of the European Union.

The views expressed herein can in no way be taken to reflect the official opinion of the European Union.

This review was commissioned by the European Commission and undertaken by the European Forest Institute’s EU FLEGT Facility which is funded by the European Union, the Governments of Finland, France, Germany, the Netherlands and the United Kingdom. www.euflegt.efi.int

Table of contents

Introduction ...... 3 Part I – Actions taken in implementing the FLEGT Action Plan (2003-2010) ...... 7 Involvement in FLEGT Action Plan implementation ...... 7 Institutional setup for FLEGT implementation ...... 8 Area #1 – Support to timber producing countries ...... 8 Area #2 – Trade in timber ...... 13 Area #3 – Public procurement ...... 16 Area #4 – Private sector initiatives ...... 18 Area #5 – Financing and investment ...... 20 Area #6 – Use of existing legislative instruments...... 21 Area #7 – Conflict timber ...... 22 Part II – Perception of achievements, and further reflections on the implementation of the FLEGT Action Plan ...... 24 Overall assessment of FLEGT Action Plan implementation...... 24 Changes and trends with implications for FLEGT ...... 27 Other themes ...... 30 Final remarks ...... 33 Part III – Conclusions and questions for consideration ...... 35 Annex I: Questionnaire ...... 40 Annex II: Financing of FLEGT-related actions ...... 58 Annex III: Key FLEGT-related studies ...... 81 Annex IV: Chronology of documents which have arisen from and have influenced the FLEGT Action Plan ...... 90

Introduction

In 2003 the European Union (EU) adopted the EU FLEGT (Forest Law Enforcement, Governance and Trade) Action Plan describing various mechanisms for curbing illegal logging and fostering good governance in timber producing countries.

The European Forest Institute (EFI) was contracted to collect all the information needed to produce the first systematic progress report on the implementation of this Action Plan, and on this basis build a comprehensive picture of activities undertaken by the European Commission (EC) and EU Member States (MS) and of achievements made in the period 2003 to 2010.

The following methodology was used: - A questionnaire survey was conducted with EU MS and the EC in September and October 2010. The questionnaire included a mix of closed and open questions, as well as an appendix for reporting the financing of key FLEGT-related actions and studies. - Replies to the questionnaire were processed and systematically analysed using simple data description methods and qualitative analysis of the content of open answers. The qualitative analysis aimed to identify and categorise ‘themes’ in the answers received, establish the frequency with which similar themes were raised, highlight points of convergence and divergence, and, where relevant, identify linkages between topics and themes. - A chronological list of forty-eight key documents, published between 1996 and 2010 and considered to capture the thinking that has influenced FLEGT, and that which has arisen from FLEGT, was also prepared. Annex IV provides a brief overview of the contents of these publications, with a focus on the key contributions they made to the understanding of illegal logging, forest governance challenges and how to address them. Findings from these publications were used in conjunction with the results of the questionnaire survey and expert knowledge to interpret survey results and draw conclusions.

The analysis that follows is based on twenty-four questionnaires returned by the EC and twenty- three MS between the end of September and mid-November 2010. At the time of finalising this report, Estonia, Malta, Portugal and Spain had not returned their questionnaires.

This report is divided into three parts: - Part I provides a detailed summary of replies to the first part of the questionnaire, which is primarily focused on actions taken between 2003 and 2010 to implement the seven areas of the FLEGT Action Plan. - Part II provides a detailed summary of replies to the second part of the questionnaire, which explores the perception of achievements of the Action Plan so far, its strengths and weaknesses, the evolution of the context in which it operates and plans for the future. - Part III provides conclusions in the form of a summary and interpretation of the main findings of the survey, and reflection on some considerations for the continued implementation of the FLEGT Action Plan, in the light of recent developments in the global and regional forest-related agendas.

The report also includes the following annexes: - Annex I: Survey questionnaire. - Annex II: Financing of FLEGT-related actions, as reported by the EC and some MS.

- Annex III: FLEGT-related studies, as reported by MS. - Annex IV: Chronology of documents that have arisen from, and have influenced, the FLEGT Action Plan.

A number of lessons have been learned from this initial review of the Action Plan, which will be used, alongside feedback received from report readers, to improve the methodology for future reporting exercises.

Note, finally, that a more concise version of this report, entitled ‘Overview of the FLEGT Action Plan Progress Report 2003-2010’, is available on the website of the EU-EFI FLEGT Facility (http://www.euflegt.efi.int/portal/).

Part I Actions taken in implementing the FLEGT Action Plan (2003-2010)

The views expressed herein can in no way be taken to reflect the official opinion of the European Union.

Part I – Actions taken in implementing the FLEGT Action Plan (2003-2010)

The first part of this report provides a detailed summary of replies to the first part of the questionnaire, which is primarily focused on actions to implement the seven areas of the FLEGT Action Plan, taken between 2003 and 2010. The information provided below is derived from the responses provided by the EC and twenty-three MS.

Involvement in FLEGT Action Plan implementation

The nature and degree of involvement in the implementation of the FLEGT Action Plan varies across MS. Fig. 1 displays the number of MS actively involved in the implementation of each of the seven areas of the Action Plan, as established on the basis of replies to the questionnaire.1 The EC was involved in all seven areas.

(Based on 23 MS questionnaire replies)

The main areas of the Action Plan are the following: - Area #1 – Support to timber producing countries. - Area #2 – Trade in timber. - Area #3 – Public procurement. - Area #4 – Private sector initiatives. - Area #5 – Financing and investment. - Area #6 – Use of existing legislative instruments. - Area #7 – Conflict timber.

Their respective objectives are specified below.

1 The criteria used for determining involvement are the following (see questionnaire in Annex I). Area #1: positive reply to at least one of Q 1A, 2A, 4A, 5A, 6. Area #2: positive reply to at least one of Q 11A, 12A. Area #3: positive reply to at least one of Q 15A, 18A, 19A. Area #4: positive reply to at least one of Q 20A, 21A. Area #5: positive reply to Q 24A. Area #6: positive reply to at least one of Q 27A, 28A, 29A. Area #7: positive reply to Q 31A.

Institutional setup for FLEGT implementation

All respondents have some sort of structure, formal or informal, for ensuring at least a minimum of coordination on FLEGT-related matters. In a majority of MS structures are in place for overall implementation of the FLEGT Action Plan. However, in a few MS the FLEGT-related institutional setup seems to be limited to the implementation of the 2005 FLEGT Regulation.

In EU MS, various types of organisations are involved in FLEGT-related coordination structures. Those more frequently quoted are: (1) Forestry, agricultural and/or environmental authorities.2 (2) Customs administration/Ministry of Finance. Other types of organisations also mentioned by respondents, but with lower frequency, include: (3) Development cooperation administration. (4) Other government departments/agencies (e.g. Ministry of Economic Affairs, Cabinet Office, representation of sub-national entities). (5) NGOs. (6) Private sector organisations. (7) Think tanks and research institutions.

In the European Commission, DG Environment and DG Development are co-leaders in implementation of the FLEGT Action Plan. Other DGs involved are RELEX, AIDCO, Trade, Enterprise, Energy, Agriculture, Market, Taxud and the Legal service.

Area #1 – Support to timber producing countries Main objectives: Partner countries receive support to address illegal logging in a just and equitable manner; this support helps them develop timber legality assurance systems, increase transparency in forest management, build their capacities with regard to all aspects of forest governance, and implement the policy reforms needed to tackle illegal logging. In practice, support to timber producing countries has so far largely (but not exclusively) focused on the preparation and negotiation of Voluntary Partnership Agreements (VPAs).

During the 2003 to 2010 period, the following was achieved in relation to the preparation, negotiation and implementation of VPAs: - Three VPAs were signed with Ghana in 2008, the Republic of Congo in 2009, and Cameroon in 2010; implementation is in progress, and the first FLEGT licenses are expected to be issued in 2011. A fourth VPA, with the Central African Republic, was initialled and implementation is imminent. - Formal negotiation of VPAs was initiated with six more countries: the Democratic Republic of Congo, Gabon, Indonesia, Liberia, Malaysia and Vietnam). - Following expressions of interest in VPAs from Côte d’Ivoire, Guyana and Thailand, preparatory work which could lead to formal negotiations was undertaken and is still in progress. - Information was provided in various partner countries in the Asia-Pacific region, Central and South America and Africa, as well as at a number of regional and international meetings. As a result, requests for information and informal discussions came from a further ten countries and some initial scoping work was conducted.

2 In quite a number of MS forestry authorities depend on the Ministry of Agriculture.

- A formal cooperation process on FLEG was initiated with China in 2009.

The process of moving from the introduction of FLEGT to VPA negotiations involves different steps: (1) Raising awareness about FLEGT. (2) Supporting stakeholders in preparation for a VPA. (3) Formally introducing the FLEGT VPA to enable stakeholders to identify and communicate their interests and envision the potential scope of a VPA. (4) Negotiating the full legal text including annex commitments. (5) Ratification and preliminary implementation. (6) Establishing a credible licensing scheme. (7) Implementing policy, legislative and institutional reforms.

Each stage requires input from the EU Delegation, at political and technical levels, and also from EC headquarters, particularly at stages 3 and 4. The Commission estimates its inputs for negotiation and implementation, per FLEGT partner country, at between 0.5 and 1 person/year from the Delegation, depending on the presence of an in-country FLEGT facilitator, and 0.4 person/year from headquarters.

The Commission is not alone in supporting FLEGT introduction and negotiations. During the 2003- 2010 period, six MS3 provided in-kind technical support to one or several FLEGT partner countries for the preparation, negotiation and/or implementation phases of VPAs. This support was provided in the form of short-term technical assistance, as well as the posting of government officials or experts as FLEGT facilitators on a medium- to long-term basis.

Six MS4 as well as the EC also provided financial support to one or several FLEGT partner countries for the preparation, negotiation and/or implementation phases of VPAs and for other FLEGT-related activities. The support was either provided directly or indirectly through financial support for the EU- EFI FLEGT Facility. The Commission notes that financial support to VPA countries is provided in different ways in each country: the instruments used include projects (e.g. Indonesia, Malaysia), budget support (e.g. Ghana), and/or a component of an ongoing project (e.g. Liberia, Congo). Support for FLEGT-related national activities can also be provided through multi-country or regional projects.

In practice, financial support for timber producing (and occasionally processing) countries was provided in various forms to: (1) VPA country administration in negotiating/implementing VPAs, including support for the development of chain-of-custody and legality assurance systems. This type of support was the most frequently cited. (2) Institutional strengthening and regulation of forest management in VPA countries, including support for improved security of tenure rights, forest management transparency, and the financing of an independent observer. (3) The development of participatory approaches/stakeholder consultation processes, including building the capacity of NGOs in VPA countries and NGO advocacy. (4) Private sector initiatives in VPA countries. (5) Research and think tank initiatives on VPAs.

3 Belgium, Denmark, France, Germany, the Netherlands and the United Kingdom 4 Belgium, Finland, France, Germany, the Netherlands and the United Kingdom

(6) Other actions, including: independent observation; the investigation and monitoring of trade flows; community-based forestry development and governance systems; monitoring activities; sector budget support for the environmental sector;5 and the financing of studies, conferences and workshops on FLEG(T)-related issues.

Nine partner countries involved in VPA negotiations have particularly benefited from technical and financial support: - In Africa: Cameroon, the Central African Republic, the Democratic Republic of Congo, the Republic of Congo, Gabon, Ghana and Liberia. - In Asia: Indonesia and Malaysia.

Other timber producing countries in Africa, Asia and the Pacific region, Central and South America, and Eastern Europe have also benefited from support actions, and China, as an increasingly important wood processing country, has also been involved in a number of them.

As far as EC financing is concerned, since 2006, the Environment and Natural Resource Thematic Programme (ENRTP) has identified FLEGT as a specific theme for support. This focus has generated a number of important projects and programmes. As the ENRTP works mainly through calls for proposals, the selected projects have been initiated by key FLEGT stakeholders in the private sector and civil society. In 2006 a targeted proposal was used to set up a global facility at EFI to support the preparation and development of VPAs. Funding was multi-donor, with important EC contributions. EFI also received a separate grant to provide support for FLEGT development in Asia. Another facility was set up at FAO to support FLEGT-related activities in ACP countries. In addition, FLEGT-related funding has found its way through other multilateral channels such as the World Bank’s Profor programme and the World Bank-executed ENPI FLEGT programme, which focuses on the Eastern neighbourhood countries and Russia.

In addition to support provided to FLEGT partner countries, several MS have also provided direct support to the European Commission. Five MS6 participated directly in VPA negotiation, involving officials, diplomats or development agency staff in the process. This involvement in VPA negotiations was specific to six African countries,7 and three Asian countries.8 Malaysia, Cameroon and Ghana are the partner countries in which the largest number of different MS were involved in negotiations.

Six MS9 supported VPA negotiation through the secondment of government staff, for a total of 403 person-months10 (see Fig. 2). Three of these11 also financed external technical expertise to support VPA negotiations.

5 The European Commission, France, the Netherlands and the UK, alongside a few other non-EU donors, support a Natural Resources and Environment Sector Budget Support Programme (NREG) in Ghana. A significant share of the support provided is dedicated to strengthening the Forestry Commission and the implementation of the Ghana VPA. One of the targets associated with the sector programme in Ghana is related to progress in implementing the VPA. 6 France, Germany, Greece, the Netherlands and the United Kingdom 7 Cameroon, the Central African Republic, the Republic of Congo, Gabon, Ghana and Liberia 8 Indonesia, Malaysia and Vietnam 9 Belgium, France, Germany, Greece, the Netherlands and the United Kingdom 10 Excluding staff from Belgium for which no figures were provided. 11 Germany, the Netherlands and the United Kingdom

Fig. 3 MS involved in supporting the preparation, negotiation and initial implementation of VPAs in the 2003-2010 period:

A = In-kind technical support to FLEGT partner countries B = Financial support to FLEGT partner countries C = Direct participation in VPA negotiations D = Support to EC through secondment of government staff E = Support to EC through appointment of government consultants

Beyond 2010, the EC and eleven MS12 plan to maintain or develop actions in support of VPA preparation, negotiation and/or implementation. Future support will take the form of (see Fig. 4): (1) Support to FLEGT partner countries, notably for the development and strengthening of timber tracking systems. (2) Support to the European Commission. (3) Support to multilateral initiatives.

12 Belgium, Denmark, Finland, France, Germany, Latvia, the Netherlands, Romania, Slovenia, Sweden and the United Kingdom.

(11 respondents, multiple answers possible)

One respondent mentions the close link in future years between VPA implementation and REDD+13 programmes; this aspect is addressed in the second part of this report. Another respondent stresses the importance of keeping multilateral forums on the agenda, since ‘multilateral measures would be more effective and easier to comply with by timber traders than several different measures by countries and regions’.

In future, a larger number of partner countries and regions will benefit from support than has been the case to date. Countries/regions specifically mentioned by respondents include: - In Africa: Democratic Republic of Congo, Ghana, Liberia, Madagascar – as well as COMIFAC and SADC at the regional level. - In Asia: China, Indonesia, Laos, Vietnam – as well as ASEAN. - In the East European neighbourhood: Belarus, Russia, Ukraine and the Western Balkans.

Additional countries may be identified for specific support as they enter more formal VPA preparation or negotiation processes. The current policy of the EC is to respond positively to any serious request from interested partner countries,14 while recognising that the trade-related incentive underpinning a VPA is limited for some countries with low levels of direct trade in timber with the EU. Any future FLEGT strategy will have to address the question of how best to respond to demand from countries where the VPA model would appear to be inappropriate.

The European Commission is currently planning its new strategy for support to VPA preparation, negotiation and implementation. With the growing demand for VPAs, it is estimated that up to EUR 1 Billion may be needed from the EC and MS over the next ten years. The EC is about to commit EUR 55 Million for the period 2011 to 2013 in the ENRTP multiannual programming for support to FLEGT activities. Financial support for specific partner countries, particularly for VPA implementation, is also programmed through national country strategies; however, these funds can prove difficult to programme in a way that suits the rhythm of VPA negotiations and often do not correspond the national planning cycles of EC country level assistance. For this reason a rapid response facility has been set up at EFI. In addition, financial support from MS ., which can in some cases be more responsive than that of the Commission due to faster administrative procedures, will be critical in the fast-moving VPA preparation and negotiation phase.

13 REDD is the initiative aimed at Reducing Emissions from Deforestation and Forest Degradation launched in the context of the UN Framework Convention on Climate Change. 14 In practice most of the cooperation so far has taken place with partner countries that have direct timber trade relationships with the EU, and the focus is now also expanding to incorporate important timber processing countries.

To conclude, a comment on the limited number of MS that have so far been actively involved in this component of the FLEGT Action Plan. France, Germany, the Netherlands and the UK have been the most active in the ‘ad hoc working group on FLEGT’ set up by the European Commission.15 A few other MS with development cooperation activities in the regions most concerned with FLEGT have also made contributions. Some comments received indicate that MS interest and involvement in support to timber producing countries are at least in part driven by the origin of their timber imports, as well as their external cooperation patterns. For instance, a respondent from a MS that has not so far provided technical or financial support for VPA preparation/negotiation specifies that cooperation with specific timber producing countries is not justified since this MS has few or no imports from VPA countries. Other respondents mention a desire to work with neighbourhood countries (Belarus, Russia, Ukraine) or regions (Western Balkans), where most of their timber trade is done, rather than with tropical countries. These MS would like to investigate the possibility of doing so under the FLEGT umbrella. Some small MS also tend to be apologetic about their lack of involvement, which they justify on the grounds of the small size of their national administrations and the lack of resources.

Area #2 – Trade in timber Main objectives: Through the implementation of licensing schemes, the EU imports only legally produced timber/timber products from FLEGT partner countries, and over time the volumes of illegal timber/timber products entering the EU market are significantly reduced; additional legislation is adopted, if necessary, to prevent the import and marketing of illegal timber/timber products; a multilateral framework is established for international collaboration on tackling the trade in illegal timber.

During the reporting period, the following legislation was adopted in the context of the FLEGT Action Plan: - Council Regulation (EC) No 2173/2005 on the establishment of a FLEGT licensing scheme for imports of timber into the European Community (the ‘FLEGT Regulation’). - Commission Regulation (EC) No 1024/2008 laying down detailed measures for the implementation of Council Regulation (EC) No 2173/2005 on the establishment of a FLEGT licensing scheme for imports of timber into the European Community (the ‘FLEGT Implementation Regulation’). - Regulation of the European Parliament and the Council no. 995/2010 laying down the obligations of operators who place timber and timber products on the market (the ‘EU Timber Regulation’, formerly known as the ‘due diligence regulation’).

Within the European Commission, DG Development had the lead on drafting the 2005 FLEGT Regulation and the FLEGT negotiating directives, while DG Environment had the lead on the 2008 FLEGT Implementation Regulation as well as the 2010 EU Timber Regulation. Support was also provided by DGs Taxud, Enterprise, Agriculture, Environment, Relex, Aidco, Energy and the Legal service.

Across MS diverse government departments/agencies were involved in the negotiation of the FLEGT Regulation (2005) and the EU Timber Regulation (2010). Those most frequently cited are: (1) Forestry, agricultural and/or environmental authorities. (2) Customs administration/Ministry of Finance. Other departments/agencies noted less frequentlycy, include:

15 Participation in this working group is open to any willing MS.

(3) Ministry of Economy/Trade/Industry. (4) Ministry of Foreign Affairs. (5) Development cooperation administration. (6) Other government department/agencies.

At the time of submitting their responses to the questionnaire, twelve of the twenty-three respondent MS16 had already officially designated a ‘competent authority’ to receive, accept and verify FLEGT licenses according to the terms of the FLEGT Implementation Regulation (2008); eleven had not. Competent authorities are typically: (1) either forestry, environmental and/or agricultural authorities; (2) or the customs administration.

Only two respondent MS have a competent authority not belonging to one of these two categories.

Four MS17 and the EC, have undertaken or supported studies on the consequences/impacts of the FLEGT Regulation (2005) and/or the EU Timber Regulation (2010). These studies focus on consequences for timber/timber product importing countries, as well as consequences for countries which both produce and process timber such as Malaysia and Indonesia. Germany also financed: - several scientific studies in the period, aimed at improving timber tracking by means of DNA bar- coding and isotopic fingerprinting; these studies support the identification of both timber species and timber origin.18 - a 2007 study on the share of tropical timber imports into the EU from tropical producer countries, with a focus on countries with an interest in VPAs. - a 2009 study on the likely share of timber from illegal sources (from all regions, tropical and non- tropical) in relation to total EU timber imports from outside the EU.

In addition, eleven EU governments19 and the European Commission engaged in multilateral, regional or bilateral initiatives with non-EU timber consumer countries to advance a multilateral framework to improve forest law enforcement, governance and associated trade. Eight forums are mentioned in this context, three of them multi- or plurilateral (UNFF, G8, ITTA) and the rest regional: (1) World Bank forest law enforcement and governance (FLEG) regional initiatives, including ENAFLEG (Europe & North Asia). (2) G8 summits. (3) International Tropical Timber Agreement (ITTA). (4) United Nations Forum on Forests (UNFF). (5) ASEAN work on forests. (6) Congo Basin Forest Partnership. (7) Forest Europe Ministerial Conference. (8) Baltic Sea initiative.

Bilateral initiatives with China,20 Japan and Russia are also mentioned. One respondent mentions an indirect contribution to the advancement of a multilateral framework through support for IUCN, and

16 Belgium, the Czech Republic, Cyprus, Hungary, Ireland, Latvia, Lithuania, the Netherlands, Poland, Romania, Slovenia, and the United Kingdom. 17 Bulgaria, the Czech Republic, the Netherlands and the United Kingdom 18 The EC also financed such a study. 19 Austria, Belgium, Denmark, Hungary, Finland, France, Germany, Latvia, the Netherlands, Sweden, and the United Kingdom. 20 The China-EU coordination mechanism on illegal logging

another through participation in negotiations in relation to the UN Convention on Biological Diversity. Contributions have also been made to the Tropical Forest Law Enforcement & Trade (TFLET) thematic programme related to the ITTA.

Respondents expressed varied opinions of the expected impacts of the EU Timber Regulation on trade in timber and on VPAs. Their views, presented here by decreasing order of frequency, can be summarised as follows: (1) Positive impacts expected on VPA countries (increased incentive to sign VPAs, competitive advantage on the EU market). (2) Positive impacts expected on timber trade in terms of ‘cleaning up’ the market, moving to lower-risk suppliers, increasing transparency throughout the supply chain, increasing interest in ways to demonstrate legal compliance. (3) Negative impacts expected on the timber trade, for example through increased costs/prices and/or decreased traded volumes. (4) Partial trade diversion to less demanding markets. (5) Negative impacts expected on timber trade in terms of competitiveness of timber products.

Overall, positive expectations dominate. Four respondents out of 23 mention that impacts on the timber trade can be expected but are hard to predict at this stage, and only three expect no or no significant impacts.

With regard to impacts on VPA countries, one respondent mentions that the entry into force of the new regulation in early 2013 will help set a target date for the development of legality assurance systems.

With regard to ‘cleaning up’ the trade, the new regulation is expected to create a ‘level playing field’ for those partner countries that export legal timber to the EU. One respondent notes that ‘the 2008 Lacey Act amendment and the very recently adopted EU Timber Regulation are already changing supplier engagement with more interest in ways to demonstrate compliance’, however ‘it is not clear yet whether these changes are actually impacting trade flows’. Another respondent expresses the view that the impact of the new regulation on timber imports by the EU might not be very significant because any major players in the market have already set up systems to eliminate illegal timber from their supply chains.

With regard to the issue of costs, three respondents express concern about the capacity of small- and medium-sized importers of timber and timber products to cover the increased costs associated with compliance. This may result in further integration of supply chains, consolidation of the industry and reduced competition.

One respondent also mentions that some actions to fight illegal logging at the national level, such as the adoption of a new Forest Code and new regulations regarding the trade in, and circulation of, timber, and the implementation of new system for tracking and monitoring timber, may have some positive effects in terms of reducing imports of illegal timber.

One respondent notes that the impact of the new regulation on trade ‘will depend largely on the way we are able, within the EU, to effectively work as a team without any discrepancies or loopholes’.

Finally, one respondent addresses in more detail the question of changing patterns in trade, for example new processing hubs, trade diversion, increasing demand from China and India and the growing significance of domestic demand in some partner countries. These aspects are further discussed in the second part of this report.

Area #3 – Public procurement Main objective: EU MS public procurement policies promote the use of sustainable and verified legal timber/timber products.

Eleven MS21 have adopted a public procurement policy for timber/timber products and one (Slovenia) is about to adopt such a policy. The main targets of these policies are construction timber, furniture and paper products and in general they require products to have evidence of one or a combination of the following: (1) Sustainability. (2) Legal origin. (3) Legal compliance with regard to ecological, social and/or economic criteria. Sustainability is the most frequently cited criterion, followed by legal origin.

Timber procurement policies were promoted and supported by a variety of actions. Denmark, for instance, specifies that its procurement-related initiatives include the launch of guidelines for public purchases of legal and sustainable tropical timber in 2003; two international workshops on the design and implementation of public procurement policies for legal and sustainable timber, in 2004 and 2008; temporary guidelines for purchasing legal timber in 2006; a seminar on verification of legal timber in 2007; and the launch of revised guidelines for purchasing legal and sustainable timber in 2010.

Eight of the twelve public procurement policies referred to above22 specifically recognise and will favour FLEGT-licensed timber/timber products once they are in the market – or are in the process of being drafted or revised to include such recognition. France envisages assessing VPAs with regard to a set of criteria to be able to classify FLEGT-licensed timber as certified timber for the purpose of public procurement policies.

The four MS23 with procurement policies not specifically recognising/favouring FLEGT-licensed timber justify it as follows: - FLEGT-licensed timber will be recognised as meeting criteria for legal origin but will not be explicitly favoured. One respondent specifies that the procurement policy does not specifically favour FLEGT-licensed timber to the detriment of other timber that has been accepted as legal, as this may raise conflicts with WTO and EU rules regarding public procurement. - The public procurement policy is focused on sustainability and not on legality alone. It is feared that recognition of VPAs could act as a disincentive for sustainability certification.24 - FLEGT is not a product label or license and will not appear on products, which makes recognition difficult in practice.

21 Austria, Belgium, Bulgaria, Cyprus, Denmark, Finland, France, Germany, Italy, the Netherlands and the United Kingdom. 22 Those of Austria, Cyprus, Denmark, Finland, France, Italy, Slovenia and the United Kingdom. 23 Bulgaria, Belgium, Germany and the Netherlands 24 On the relationship between legality and sustainability, one respondent points out that legality is one aspect of sustainable forest management, but as such does not provide a guarantee of sustainable management. Another one notes that: (i) the characterisation that FLEGT’s focus on legality as a stepping stone towards sustainability is somewhat simplistic and unhelpful; (ii) analysis suggests that FLEGT makes an important contribution to sustainable forest management at the national level, and in this sense has a greater overall impact than legality verification schemes for specific forest areas.

It should be noted that the European Commission has established formal guidance to MS on green procurement policies. This guidance specifically recognises FLEGT-licensed timber as compliant with legality requirements (ecological, social and economic criteria). However, it introduces a distinction between legality and sustainability criteria that is not currently supportive of FLEGT-license recognition. There is an ongoing process to develop further guidance specifically for timber, jointly with MS (through the Standing Forestry Committee), which discusses inter alia the role of FLEGT- licensed timber. In that context, the Commission aims for improved recognition of FLEGT-licensed timber.

Five of the MS that have a procurement policy in place for timber/timber products25 have already made assessments of their effectiveness. The conclusions of these assessments vary across MS: - In one case, implementation is judged to be overall satisfactory, so that no major adjustments are required. This MS has chosen to base its procurement rules on internationally recognised certification schemes, in order to reduce the administrative burden. - One MS found the need for more operational guidance and improved communication and translated this into a revised set of guidelines for implementation. - One MS concluded that the procurement policy was in need of improved communication and guidance. Its targets on paper are deemed to be fully achieved, but the assessment pointed to the need to extend the policy to other products, such as stationery products, furniture and construction timber. A revision of the policy is under way. - One MS concluded that the level of implementation of the policy was variable. The assessment pointed to the need to strengthen reporting on, and internal monitoring/auditing of, implementation. - In the fifth MS, the study revealed that procurement officers found the procurement policy difficult to understand, and that the scope of the policy was not sufficiently clear. This has led to controversy with the agency in charge of public works which believes it is not bound by the policy. A policy update is under way to address these issues, which will be followed by training and workshops to support implementation.

Most EU governments that have not yet adopted a procurement policy for timber/timber products have plans to do so. Only two respondents claim not to have such intentions: - One justifies this decision on the basis of having adopted a ‘strong Forest Act’ without specifying how this might apply to imported timber products. - The other explains that the national public procurement law does not refer to any individual product group, but that environment-related criteria may be included in any contract award procedure at the discretion of the contracting authority. Nevertheless, this MS has promoted the use of the Green Public Procurement Toolkit developed by the European Commission.

Local authority initiatives with regard to timber/timber product procurement exist in twelve MS:26  Three cases in the context of implementation of the national procurement policy.  Four cases at the initiative of some local authorities.  Five cases which are a combination of both.

25 Belgium, Denmark, France, Germany and the United Kingdom 26 Austria, Belgium, Bulgaria, Denmark, France, Germany, Ireland, Italy, Lithuania, Luxembourg, the Netherlands and the United Kingdom.

Only two of these twelve MS27 declare that they monitor local authority initiatives. It appears that national procurement policies may target either the national/federal administration only, or both the national/federal administration and the regional/local authorities, with the latter subject to either mandatory requirements or to recommendations only.

Besides public procurement policies, twelve MS28 and the European Commission use or will consider using other instruments to promote the use of legally and/or sustainably produced timber. These instruments include: (1) National-level actions to fight illegal logging or develop forest certification schemes. (2) National eco-labels. (3) International certification schemes (FSC and PEFC). (4) Sustainable resource or sustainable construction policies/strategies, in some cases including the use of standards. (5) Consumer information/awareness campaigns.

Three respondents also refer to the implementation of the recent EU Timber Regulation as a complementary instrument to public procurement policies.

In the Netherlands, a tax on unsustainably harvested or illegal timber was studied and seriously considered; however, the proposal was put on hold due to the administrative burden and potential conflicts with international law.

Area #4 – Private sector initiatives Main objective: More responsible practices by the private sector which increase the use of legal timber/timber products in the EU and in FLEGT partner countries, and thereby promote sustainable forest management.

In addition to actions undertaken by the European Commission at EU level, seventeen MS29 have worked with the private sector to advance the aims of FLEGT within their own country. Actions undertaken in this context have involved various types of organisations, including, by decreasing order of frequency: (1) Business federations / trade associations specifically involved in the processing and/or distribution and sale of timber / timber products. (2) Individual companies. (3) Other business federations / trade associations. (4) NGOs.

27 Austria and Lithuania 28 Austria, Belgium, Finland, Germany, Hungary, Ireland, Latvia, Lithuania, the Netherlands, Poland, Sweden and the United Kingdom. 29 Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Latvia, Lithuania, the Netherlands, Sweden and the United Kingdom. In addition, Slovakia mentions the launch of a website dedicated to the benefits of forest certification. This action is not specifically related to FLEGT, but could nevertheless be considered as ‘advancing the aims of FLEGT’.

Actions are typically undertaken on an ad hoc basis and include, inter alia, awareness raising, technical support by civil servants, and meetings with companies, business federations and associations during the preparation of FLEGT-related legislation, and then again after the adoption of such legislation, to inform stakeholders of the practical and legal implications. Belgium reports signing a sectoral agreement with its timber trade federations by which signatories commit to a quantified target for increasing the market share of products originating from sustainably managed forests, and to investing in training and awareness-raising. In five MS, such actions take place in the context of a wider, structured national dialogue with stakeholders on forest-related matters. Some actions are country-specific, but others are international in scope, such as support for the The Forest Trust’s Timber Trade Action Plan.

Four MS30 and the European Commission, have also worked with the private sector to advance the aims of FLEGT in FLEGT partner countries. In this case too, the primary targets of actions undertaken are business federations and trade associations specifically involved in the processing and/or distribution and sale of timber and timber products. Other types of organisations were also involved, such as the WWF Global Forest and Trade Network and NGOs supporting companies in timber- producing countries. One MS provided loans to timber companies in Central Africa to establish sustainable forest management plans in accordance with domestic legislation.

Cooperation with private sector organisations in partner countries tends to be driven by an EU-based or international private sector organisation, with the support of an EU MS or the EC. Countries targeted by such actions include VPA partners as well as Brazil and China. Initiatives involving direct business-to-business dialogue between EU importers and producers in developing countries are deemed to have been particularly effective. In VPA countries the EC has also provided support to help the private sector develop their position in the context of VPA negotiations.

Ten respondents31 in addition to the EC report changes in the policies and/or practices of the private sector in their country as a result of FLEGT.32 The observed changes include, by decreasing order of frequency: (1) Increasing adoption of voluntary codes of conduct and procurement policies by standard-setting bodies and business federations which make them mandatory for their members, notably in the timber, paper and building industries. The codes require the purchase of timber with evidence of legality and sustainability,. (2) Increasing adoption of national or international standards such as PEFC and FSC by forest owners and buyers of timber products. (3) New chain-of-custody initiatives by timber trade federations and large-scale importers of tropical timber, aiming to minimize the risk of illegal timber entering supply chains. (4) More general acceptance by the private sector of the principle of checking the legal origin of timber products.

These changes may result directly from FLEGT-discussions and the new obligations created by the EU Timber Regulation, but are also influenced by stronger public procurement policies for timber and by

30 Austria, France, Germany and the United Kingdom 31 Austria, Denmark, France, Germany, Hungary, Italy, Latvia, Luxembourg, the Netherlands and the United Kingdom. 32 One of them notes that ‘it is difficult to judge on the effects that could be attributed to FLEGT‘: the FLEGT Action Plan has contributed to raising awareness of problems related with illegal logging among members of Parliament, NGOs and private sector – but the fight against trade in illegally harvested timber would probably have been high on the national agenda even in the absence of the FLEGT Action Plan.

the adoption of more stringent policies and regulation aimed at fighting illegal logging on the national territory. The largest forest industry companies are typically the most advanced in the development of systems to avoid illegal timber in their supply chains.

Some private sector initiatives aimed at ensuring the purchase of legally-verified timber and timber products are deemed very positive,33 and some concepts developed in this context, such as due diligence and monitoring, have been influential in shaping the EU Timber Regulation.

Area #5 – Financing and investment Main objective: EU-based banks and financial institutions that lend to or invest in the forest sector adopt due diligence assessments which promote legality and adherence to environmental and social standards.

This aspect of the Action Plan (not to be confused with the former title of the EU Timber Regulation) was included because of evidence that the pulp and paper sector in Indonesia was expanding rapidly through access to international investment, without security of raw material supplies, and this was driving illegality.

Only three MS34 in addition to the EC report work with banks and other financial institutions to encourage greater scrutiny in forest sector investments. The United Kingdom did so through support for The Forest Footprint Disclosure project, co-financed by various private foundations. Work in this area has also been undertaken in the context of think-tank research and seminars, or the organisation of discussions between banks and forest sector stakeholders. The Netherlands specifies that investments by banks in the forest sector are monitored by the central bank (the regulatory authority for banks) from the viewpoint of financial reliability.

Besides the EC only the United Kingdom reports any evidence that at least some banks and other financial institutions have changed their policies and practices to encourage better forest governance and discourage illegal logging. One case reported by both concerns HSBC, a large bank with significant international operations, which has based its lending policy on the Equator Principles.35 The bank has a global forest policy requiring its clients in the forest sector to obtain independent certification that their timber operations or supplies of timber products are legal and sustainable. The policy has led the bank to drop some major customers. In Malaysia HSBC has been instrumental in organising a forest dialogue between a range of stakeholders working with and in the forest sector.

The Norwegian Pension Fund is another example of a financial institution that has disinvested from a company involved in illegal logging activities. Also, PriceWaterhouseCoopers has developed a Sustainable Forest Finance Toolkit together with the World Business Council for Sustainable Development, and advises clients on financial due diligence.

33 For instance, Italy reports a private sector (wood and cork industry) initiative to establish specific criteria for the due diligence system to be implemented in the wood and paper sectors. 34 Latvia, the Netherlands and the United Kingdom 35 The Equator Principles are based on the International Finance Corporation (IFC) performance standards on social and environmental sustainability, and on the World Bank Group’s Environmental, Health and Safety general guidelines. The Equator Principles promote socially responsible conduct and sound environmental practices in relation to the Project Finance initiatives. The benchmark seeks to provide a framework against which lending can be assessed, applying to all new Project Finance arrangements above US$10million. See http://www.equator-principles.com/

Because the lending policies of banks and financial institutions and their internal risk assessments are confidential, it is difficult to establish a clear view of changes taking place. However there are unsubstantiated reports of improved access to lines of credit for companies operating in VPA countries and within the EU for companies with good supply chain management resulting in low risks of purchasing illegal wood.

Note that in 2003, Chatham House (UK) prepared a report36 and organised meetings to examine the role the financial sector could play in creating incentives for responsible forestry and restricting access to finance for illegal loggers and processors, but it proved difficult to generate financial sector interest to develop a unified approach to take the work forward. The US Lacey Act amendment and EU Timber Regulation may however stimulate action in the future, by raising the risk profiles of forest sector investors and timber product importers. Generally speaking international banks have been wary of investment in large-scale projects in the sector following losses in the Indonesian pulp and paper industry, but regional banks have remained active.

Area #6 – Use of existing legislative instruments Main objective: Money laundering and other legislation is used to combat imports and use of illegally harvested timber and derived products.

Six MS37 have reviewed the applicability of money laundering or similar domestic legislation to forest sector crimes.38 Several of them concluded that such legislation did, in theory, allow the prosecution of international forest-related crimes, but two of them also came to the conclusion that prosecution would be difficult in practice, due to the challenge of gathering sufficient evidence and/or the existence of other priorities for prosecution offices. Based on a review of the work undertaken by MS, the Commission came to the conclusion that even if it is, in principle, possible to address international forest crimes through domestic legislation, this is not the most useful option for advancing the aims of FLEGT.

Four39 of the six MS concerned report efforts to disseminate the results of this review to stakeholders such as financial institutions and enforcement agencies. Germany was the most active MS in this regard: the government reviewed the applicability of a range of domestic legislation and disseminated conclusions to the national financial intelligence unit (and through it to their international network), to enforcement and prosecution agencies, to the private sector, and to various national and international NGOs. Further guidance documents for enforcement agencies were produced. Germany jointly with the Netherlands also took the lead in conducting an EU-wide information campaign, including the organisation of an international cross-sectoral workshop bringing finance, enforcement and forestry experts together in Berlin in 2004. Background papers and the main conclusions of the workshop were widely disseminated on CD.

Only the EC reports that it has provided technical and/or financial assistance to timber producing countries to deal with forest-related money laundering on their territory.

Eight MS40 declare that they have reviewed how other domestic legislation might be used to tackle international forest-related crimes.41 The EC financed some work on this component of the Action

36 http://www.illegal-logging.info/item_single.php?it_id=217&it=document. 37 Bulgaria, Finland, Germany, Latvia, the Netherlands and the United Kingdom 38 Sweden, which declares that it has not conducted such a review, nevertheless states that its legislation on money laundering and smuggling is applicable to the forest sector. 39 Finland, Germany, the Netherlands and the United Kingdom 40 Belgium, Finland, France, Germany, Hungary, Latvia, Lithuania and the Netherlands.

Plan through CIFOR/CGIAR core funding. One MS investigated whether customs legislation might be used to prevent illegal timber from entering the market. The conclusion was that customs are not mandated to enforce foreign laws so bilateral customs cooperation agreements with a specific focus on illegal timber would be required to block illegal shipments. Given that no such agreements currently exist, no concrete steps have been taken yet to implement this option.

One respondent suggests examining again how the international network of Financial Intelligence Units could be better informed and used to fight money-laundering in the timber sector. The possibilities of involving EU-based banks who finance logging or processing activities abroad in the fight against money laundering also require further investigation. Generally speaking however, there seems to be relatively little interest in doing further work in relation to this component of the Action Plan.

Area #7 – Conflict timber Main objective: A framework for addressing the issue of conflict timber is set up.

Besides the EC, five MS42 report that they have taken and/or supported initiatives in relation to conflict timber. In 2003 one of them actively supported Security Council Resolution 1478 on banning timber imports from Liberia, which has since been lifted. Another participated in a European Tropical Forest Research Network workshop on the issue in Brussels in 2006. Three respondents also make reference to the EU ban on timber imports from Myanmar.

Three MS43 also report activities related to the rights to forests of local and indigenous communities. The United Kingdom and Sweden, along with other non-EU donors, co-finance a programme entitled the ‘Rights and Resources Initiative’ (2007-2012), which, although not focused on ‘timber from conflicts countries’, can be considered to be related to ‘conflict over resource rights’. Denmark is actively involved in supporting indigenous communities’ forest rights in Bolivia, Central America and Cambodia, amongst others.

The EC has conducted limited work on the conflict timber component through projects. In addition, DG Relex and the European Council work on the issue of natural resources and conflict, particularly in relation to the Democratic Republic of Congo, Liberia and Myanmar.

Overall, it appears that the concept of ‘conflict timber’ has not captured attention in the way that ‘conflict diamonds’ did.

41 A few respondents may actually be referring primarily to a review of legislation available for tackling forest- related crimes committed on the national territory. 42 Denmark, Germany, the Netherlands, Sweden and the United Kingdom 43 Denmark, Sweden and the United Kingdom

Part II Perception of achievements, and further reflections on the implementation of the FLEGT Action Plan

The views expressed herein can in no way be taken to reflect the official opinion of the European Union.

Part II – Perception of achievements, and further reflections on the implementation of the FLEGT Action Plan

The second part of this report provides a detailed summary of replies to the second part of the questionnaire, which assesses the perception of achievements of the Action Plan to date, its strengths and weaknesses, the evolution of the context in which it operates and plans for the future. The information provided below is derived from the responses provided by the EC and twenty-two MS.44 It will support ongoing reflection on the strategy to be adopted to optimise Action Plan implementation in the coming years, and also provide inputs for future periodic reporting exercises.

Overall assessment of FLEGT Action Plan implementation

The areas of the FLEGT Action Plan considered by at least 50% of respondents to be achieving results are, in decreasing order frequency: - Area #1: Support to timber producing countries (including the preparation/negotiation of VPAs and other related aspects). - Area #2: More responsible trade in timber. - Area #3: Public procurement policies.

In contrast, the following areas are considered, more often than not, to be achieving insufficient results, or to have received insufficient attention: - Area #5: Due diligence in financing and investment. - Area #7: Conflict timber. - Area #6: Use of existing legislative instruments to fight illegal logging.

Fig. 5 provides an overall view of survey results with regard to areas achieving and not achieving results. Area #4 (private sector initiatives) is more or less equally viewed as a successful and a less successful component of the Action Plan; one respondent marked it as both achieving and not achieving results, to signal that efforts have been made but should be scaled up.

(23 respondents)

44 One respondent MS chose not to answer the second part of the questionnaire.

Comments related to the components of the Action Plan that are achieving results, and to its observable direct outputs and outcomes, bring up the following areas of achievement, by decreasing order of frequency: (1) Formulation and adoption of the EU Timber Regulation. (2) Signature of VPAs (or where they are not yet signed, start of official negotiations in view of concluding them). (3) Increasing adoption of public procurement policies with requirements for timber legality and sustainability.45 (4) Increasing adoption of private sector voluntary codes of conduct and other actions to eliminate illegal timber from supply chains. (5) Initiation of national stakeholder dialogues on illegal timber. (6) Raised awareness of illegal logging and associated problems. (7) Adoption of FLEGT Regulations (2005 and 2008) that operationalise the FLEGT licensing scheme. (8) Improvement of forest legislation and governance in VPA countries. (9) Impacts on timber trade, including a contribution to actual reductions in illegal logging and associated trade over the last 10 years,46 and increasing awareness of the fact that the market for unverified timber will soon close in the main consuming countries. (10) Increased prominence of Governance issues in policy dialogue on forests includingthe REDD agenda. (11) ‘Probably the biggest development in forest policy globally since 2000’. (12) Genuine cooperation between the European Commission and EU MS.

The adoption of the EU timber regulation is thus the most frequently cited achievement of the FLEGT Action Plan: its synergy with the signature of VPAs is underlined, as well as the fact that it brings processing countries such as China into the debate. The high frequency of mention of this point may also in part reflect the fact that the Regulation was adopted very recently, and involves all MS, including those little involved in development cooperation.

Only one respondent declares that ‘no direct outputs and outcomes of the FLEGT Action Plan have been observable yet’ although this statement may refer to their national situation rather than to overall achievements. Another considers that the ‘aimed results of the FLEGT action plan are not very clear and therefore difficult to judge on; the results could rather be regarded more as desired activities than measurable results’. In a more positive tone, one respondent comments that ‘we have been pretty good at delivering results but not very good at communicating on them’.

Comments related to the ‘underperforming’ components of the Action Plan take stock of the experience gained so far, and in some cases include a number of suggestions for improving performance. One respondent stresses that actions mentioned in this category are ‘at an early stage’ and need to be ‘further developed’, rather than abandoned, presumably. Below are a number specific comments received:

45 In this regard, one respondent deplores the insufficient recognition of FLEGT-licensed timber, which results in an impression of incoherence in VPA partner countries. 46 http://www.illegal-logging.info/uploads/CHillegalloggingpaperwebready1.pdf.

- With regard to support for timber producing countries: the programme has failed to attract the interest of Latin American countries, and countries that are important timber hubs, particularly China, are not much involved. - With regard to trade in timber: no consignment of FLEGT-licensed timber has entered the EU market yet. There is an impression that volumes of illegal timber trade have been reduced, but a clear monitoring system is lacking. - With regard to procurement policies: a significant number of MS still lack a public procurement policy covering timber products.47 - With regard to private sector initiatives; it is suggested that more attention should be paid to supporting such initiatives, while making additional efforts to raise public awareness and therefore demand for legal and sustainable products. - With regard to ‘due diligence’ by the financial sector in relation to forest sector investment: the results observed so far have been at the own initiative of a small number of financial organisations, and it has not been possible to achieve a unified approach. Different communities of practice involved in financial issues have not yet been successfully reached. One respondent points out that this area deserves more attention in the future. - With regard to the use of money laundering and other domestic legislation: there has been little appetite so far to make use of existing legislation to prosecute illegal loggers. This is true in the EU but also in FLEGT partner countries (e.g. despite specifically including illegal logging as a crime in Indonesia's legislation, no cases have resulted in convictions). Possible actions to strengthen this component of the Action Plan include: (i) further investigating ways of using money laundering legislation to fight illegal logging, by strengthening the involvement of the financial sector and the international network of financial intelligence units; and (ii) investigating the possibility of signing bilateral customs agreements that would allow blocking shipments of illegal timber at EU borders even in the absence of a VPA. However, one respondent considers that this area may become redundant when the EU Timber Regulation enters into force, and another comment indicates that this area is not considered a priority. - With regard to conflict timber: successful UN Security Council timber sanctions on Liberia indicate that the approach can be used to choke off trade. On the other hand, the timber element of EU sanctions on Myanmar has been largely ineffective. One respondent suggests that to be effective, further action probably requires an internationally agreed definition of ‘conflict resources’. This opinion is not shared by all, however since reaching international agreement on a definition would be very difficult. Those MS who have investigated the matter suggest that a generic approach to conflict timber would be of little value even if a definition could be agreed, recommending instead that actions be based on case-by-case assessments. Another respondent notes that it is difficult to address timber without also addressing many other issues underlying conflict, meaning that the timber trade is generally not a very effective entry point.

Fig. 6 shows the distribution of replies across seven proposed statements on the overall level of achievement of the FLEGT Action Plan. Respondents were provided with the following choices: (1) The AP is fully implemented and delivering good results. (2) The AP is fully implemented but needs modification to deliver good results. (3) The AP is partially implemented, but already delivering good results – keep it up. (4) The AP is partially implemented and promises to deliver good results in the future – stick with it. (5) The AP is partially implemented and needs modification to deliver good results. (6) The AP time has passed – a new policy is required.

47 It is noted however that most of those that do not currently have policies report that they intend to develop them.

(7) The AP implementation has not been satisfactory.

(22 respondents; one provided two replies)

A majority of respondents thus consider that the Action Plan has been partially implemented, is already delivering good results or promises to do so in the future, and should be further implemented. Two consider modifications will be necessary to deliver results. One cannot choose between options 4 and option 5 and has selected both. Only one considers that Action Plan implementation has overall not been satisfactory.

Changes and trends with implications for FLEGT

More than 50% of respondents believe the following changes and trends (which have emerged since the adoption of the FLEGT Action Plan and were explicitly mentioned in the questionnaire) to be very influential or influential with regard to forest law enforcement, governance and trade: - Increased awareness of the importance of forests for climate mitigation in REDD. - The US Lacey Act amendment, and the debate on and adoption of the EU Timber Regulation. - The emergence of China and other developing/emerging countries as globally important wood processing centres. - Increased demand for land to produce agricultural commodities.

Opinions are more divided on the importance of the growth of domestic demand for timber in timber producing countries and on the financial crisis and global recession. Fig. 7 shows the overall distribution of responses in relation to these factors.

(23 respondents) Other influential factors proposed by respondents include: - Renewable energy policies and energy prices, linked to increased demand for agricultural land. - The trend towards plantations and away from natural forest management, notably in Southeast Asia. - The renewed focus on biodiversity. - Technological developments that make supply chain traceability more feasible and cost effective. - The IUU Regulation on Illegal, Unreported and Unregulated fishing, noted as an interesting parallel development.

In relation to the emergence of new wood processing hubs, it is noted that the trend makes the trade response more complicated.48 However, the question of circumvention via third countries, which was a key concern at the time of drafting the FLEGT Regulation in 2005, has proved to be less of an issue of concern, as VPA partners to date have designed national systems that verify the legality of all exports, not just those destined for the EU. The respondent commenting on this issue believes it looks ‘more likely that there will be fraud to get into the system rather than to bypass it’.49 The same respondent notes that the combined effect of the US Lacey Act and EU Timber Regulation send a strong signal to the market, but that the global timber trade is changing and US/EU influence, though significant, will become less so as China and India in particular increase their demand. Also, domestic trade and consumption of wood and timber products remains very significant in most countries.

Asked about the relationship between FLEGT and REDD, the vast majority of respondents point to the existence of synergies between the two schemes, in particular with regard to the required governance structures. Common governance issues include land tenure and land use rights, timber harvesting rights, general institutional capacities, monitoring capacities, law enforcement capacities, corruption, transparency and the participation and coordination of multiple stakeholders. One

48 Extension of the FLEGT licensing scheme to wood processing hubs would require the final product from these countries to be supported by evidence of legal compliance in harvesting in a third (source) country as all finished products would require FLEGT-licenses to be exported to the EU. This may require establishing systems to secure the chain of custody into third countries, not party to the VPA, unless all raw material were sourced from VPA countries. 49 FLEGT partner countries are increasingly geographically clustered, and cooperation between them on licensing, verification and chain of custody systems may significantly reduce the risk of illegal timber slipping into the supply chain.

respondent proposes that ‘the template developed during the preparation phase before launching VPA to multi-stakeholders consultation may be replicated for REDD+ process’. Another suggests that ‘FLEGT could be some kind of a prerequisite for REDD+’. Synergies may work in both directions: twelve respondents see REDD building on FLEGT processes and utilising its outcomes (‘FLEGT supports REDD’), while two also see the FLEGT process benefiting from a ‘REDD effect’ (‘REDD supports FLEGT’), most notably because of the significant financial incentives associated with REDD, which will promote action to stop deforestation. One respondent even suggests that FLEGT may come to be regarded as a component of REDD+.

Asked about the implications of the coexistence of FLEGT and REDD for EU support, the majority of respondents stress the need for strong coordination and consistency in support to both schemes in view of supporting partner countries’ overall development strategies. This should be made available within national contexts, at the European level, in policy dialogues with partner countries, and in coordination with other donors in partner countries. The EC's REDD-FLEGT dialogue is deemed to provide a useful start by helping the ‘communities of practice’ better understand each others' programme and goals. The Non-Legally Binding Instrument on Forests (NLBI) initiative of the FAO is also identified as a mechanism that could support the coordination of the two processes. Only three respondents raise the possibility that synergies between the two schemes may be more theoretical than real, and that their coexistence also involves risks, identified as follows: - Expectations of large amounts of money under REDD and the demand for rapid action risks a diversion of efforts away from FLEGT. In the short term in particular, the two schemes may compete for financial support.50 REDD may also undermine the gains made by FLEGT, especially in terms of stakeholder engagement, due to the pressure for rapid action. - In several partner countries FLEGT and REDD are dealt with separately either within forest agencies, or by different agencies, which risks incoherence and duplication. This may be compounded by a similar separation in donor countries, with FLEGT experts in the EU not being familiar with REDD and vice versa. - Legality in timber trade does not as such ensure adequate limitations in the exploitation of forests, nor the replacement and preservation of existing forests. There is thus a potential for conflict between the two schemes.

Two respondents also highlight differences between the two initiatives. One notes that ‘REDD+ has an additional dimension of complexity as it concerns not only forests but other forms of land use’. The other considers that ‘FLEGT is primarily concerned with addressing legality, whereas REDD is focused on replacement and preservation of existing forest resources’.

These risks may be averted by building linkages to FLEGT in REDD-related initiatives, for example as was done recently by Norway in negotiations with Guyana and Indonesia), and conversely. The importance of forest governance reforms and related activities under FLEGT in delivering positive REDD outcomes must also be stressed at home and abroad. At the same time, the FLEGT concept should be presented to partner countries in a sufficiently ‘neutral’ way; indeed, if the EU is perceived as trying to push too hard for FLEGT, it may generate resistance.

Other views expressed in relation to this topic include the following: - Four respondents propose specifically acknowledging the existence of REDD in VPAs and VPA negotiations.

50 In the long run, financing for REDD+ activities is expected to be performance-based and thus not compete with financial support for FLEGT.

- Two respondents stress that the two schemes are complementary, and support for both of them is equally important. - One respondent suggests that support for both schemes should somehow be merged into a single programme. - Another mentions that support for both schemes will require a mix of involvement in political negotiations and provision of funding.

Asked about the usefulness of the FLEGT concept/name in attracting public and political support and resources, nine respondents believe it has been useful so far and twelvethink it has not. Successful conclusion of VPA negotiations has raised the political profile of FLEGT, as negotiations were a high- level, high-visibility political process. However, fifteen respondents believe other programmes or terms are now more helpful in attracting support. Two respondents stress that ‘FLEGT’ is only understood within a small circle of involved organisations. In the same vein, another states that ‘the acronym FLEGT does not lend itself to a clear public and central government recognition of what is intended’51 and suggests that a title such as ‘Illegal Logging Action Plan’ might possibly have resulted in clearer public understanding. Programmes and terms mentioned as likely to attract more support at the moment include, by decreasing order of frequency: (1) REDD, climate change mitigation. (2) Illegal logging. (3) Sustainable forest management. (4) Deforestation. (5) Natural resource governance. (6) Sustainable supply chains (timber, palm oil, soy, peat, fish).

In spite of the attractiveness of REDD, it has been possible so far to keep FLEGT on the political agenda in the EU and partner countries, particularly because of the visible results of the FLEGT Action Plan. Communication efforts are likely to be required to keep things this way.

Other themes

Asked whether they think FLEGT is a good example of policy coherence and of effective collaboration between MS and the EC, sixteen respondents reply in a positive manner, four in a negative manner and one respondent answers both ‘yes’ and ‘no’. Positive answers make reference to the following, by decreasing order of frequency: (1) Good cooperation in the preparation and adoption of the FLEGT and EU Timber Regulations. (2) Strong involvement of some MS in VPA negotiation, joint development of policies and guidance for the VPA processes, and good collaboration both at Brussels/capital and at partner country level on the technical, financial and political aspects of the negotiations. (3) FLEGT providing leverage for and being recognised in the implementation of national policies such as timber public procurement policies. (4) Good cooperation in the development of the EU-EFI FLEGT Facility. (5) Joint participation in FLEGT committees and FLEGT ad hoc working groups. (6) Sharing of experience, information, data and institutional capacity.

51 The acronym REDD+ also suffers from a problem of perception outside of its limited core audience.

One respondent mentions the common awareness of the serious, global consequences of deforestation as an incentive to act together. Another praises the good leadership provided by the European Commission and the possibility for MS to play a role in the implementation of the Action Plan. On the critical side however, the following comments were received: - Only a limited number of MS truly and actively participate in FLEGT. - EU coordination in development co-operation with partner countries has not always been effective. - The debate surrounding the adoption of the EU Timber Regulation indicated that ‘few MS understood FLEGT's aims’. - The focus so far has been on tropical countries, while East European neighbourhood countries, which are also an important source of timber, particularly for some central and east European MS, have been neglected. - FLEGT is a ‘good example of policy coherence’, but there is insufficient collaboration between MS and the Commission. - Cooperation between MS and the EC is effective but too informal, entailing the risk that FLEGT involvement by MS is limited to a small group of ‘insiders’. The items that are discussed in the ad hoc FLEGT working group should also be addressed in a more formal way. - It is not clear to what extent policies are coherent between the various MS. Guidance from the Commission required for policy coherence has been ‘slow to emerge to date, as we approach the arrival of FLEGT licensed timber from Ghana in early 2011’. - Policy coherence is a subject for discussion. For instance, different definitions are being used for legal and sustainable timber in a number of different EU regulations and directives. These include in specifications relating to wood for biomass in the renewable energy directive and in timber procurement discussions. Also some instruments that could be used by MS to promote the use of FLEGT licensed timber are incompatible with other EU rules for example VAT policies and anti- discrimination requirements in procurement. - A ‘holistic view’ of the different activities undertaken in Europe is not available.

Asked what forms of collaboration between MS and the Commission they would be ready to consider for future work on FLEGT, twelve MS mentioned a variety of specific actions, including (by decreasing order of frequency): (1) Direct support to timber producing countries,52 particularly new and future VPA partner countries, including support for the improvement of governance capacities. (2) Participation in, and coordination via, the Council Working Group on Forestry. (3) Contribution to the EU-EFI FLEGT Facility. (4) Support through specific development cooperation projects. (5) Continued participation in the informal FLEGT working group. (6) Work on coherence with climate change-related initiatives. (7) Work on VPAs specifically in neighbourhood countries. (8) Work on improved coherence of FLEGT-related policies and modalities across the EU27. (9) Further sharing of information on the timber trade.

52 One MS also provides indirect support through a debt relief programme that enables partner countries in Central Africa to redirect some resources to VPA implementation.

Six other respondents envision no specific actions at this stage, but this does not mean that they exclude cooperation, for example one mentions that in-kind contributions could be provided on some specific aspects of the Action Plan to be determined, two state that current modalities and levels of collaboration are satisfying and should be continued and one refers to possible joint or parallel funding.

Other suggested actions, not specifically related to collaboration between the EC and MS. include: - Further actions within own country, in particular to raise awareness of VPAs and regulations. - Consideration of other commodities affected by forest governance failures.

One significant aspect to consider for the future of FLEGT is that the negotiation and subsequent support to the implementation and monitoring of VPAs demands significant time. The workload is likely to increase as the number of partner countries interested in VPAs grows and one respondent expresses concern that the ‘demand for VPAs’ might soon exceed the EU’s capacity to negotiate them. Asked how MS and the EC can best meet increasing demand for staff and resources, respondents suggest the following, by decreasing order of frequency: (1) More efficient use of existing structures and resources including simplification of procedures for preparing VPAs, use of existing VPAs as ‘templates’ for new ones, adoption of regional approaches, exploitation of synergies with REDD, mainstreaming of FLEGT and other forest initiatives such as REDD and re-allocation of VPA-related tasks between the EC and MS. (2) Recruitment of additional staff by MS, including secondment to EC and EFI. (3) Increased allocation of staff and budget resources by the EC. (4) Prioritisation of potential partner countries according to the value of their timber exports to the EU. (5) More significant involvement of MS in VPA negotiations.53 (6) Increased cooperation between MS and the EC (without reference to more resources or specific areas of cooperation). (7) Increased allocation of resources by partner countries, motivated by more flexible terms and conditions of VPAs used as an instrument for REDD.

One respondent mentions that ‘the FLEGT Facility has proved to be an effective and flexible way to augment Commission capacity and should be continued’ but ‘the VPA negotiating mandate (...) will require Commission engagement, and existing capacity is unlikely to be sufficient to meet expected demands’. This respondent suggests the most effective way of enhancing capacity may be via seconded experts from MS, based in Delegations, who could play a well-defined role in negotiation and implementation processes, possibly at the regional level. Their proposed role would be distinct from that of existing ‘FLEGT envoys’. Other respondents also stress the usefulness of secondment of MS government staff.

In contrast to this view, another respondent mentions that MS cannot satisfy the increasing demand for staff and resources as their resources are also limited. This respondent considers that ‘national support for the FLEGT process is a matter of priority given to this agenda by each MS’ and the ‘main

53 The EC has witnessed a recent trend among some MS to increasingly expect the EC to deliver VPAs, while the MS would focus more on monitoring and assessment of progress, without investing in the development and implementation of the VPA itself.

competence for this lies and will lie in the Commission’. Another respondent also stresses that ‘the lead and coordination should remain with the Commission’.

Final remarks

The following additional comments were provided in questionnaire replies: - In some partner countries illegality is also a consequence of overly complicated regulations making it very difficult to operate legally. FLEGT VPA negotiation processes serve to highlight these issues. Implementation will have to be monitored to see to what extent regulatory simplification is put into place by partner countries. - One should strive to use all possible instruments that provide fair competition between forest sector enterprises, while at the same time avoiding disproportionate administrative burden. - It is important to think about how to maintain political momentum. - VPAs are proving to be effective and ambitious development tools focused on fundamental questions of forest governance and institutions/systems building, and go well beyond the initial idea of trade agreements supporting ‘clean’ supply chains. Globally, the EC and MS have been quite bad at communicating the outputs and results, but also the ambition of the FLEGT Action Plan. Improvements are required in communicating this level of ambition, and the support required to make it a reality must be provided. - Future communication regarding EU activities should ‘include in background texts a more complete and correct description of the EU process on FLEGT issues, including the reference to Council conclusions, inter alia, Council conclusions on the (...) FLEGT Action Plan’. - National implementation modalities are currently being developed in view of the expected first shipments of FLEGT-licensed timber in 2011. If this questionnaire was to be re-issued in late 2011, a number of negative answers would probably convert to positive, reflecting the finalisation of implementation modalities. - Forestry affairs within the EU are being dealt with in different DGs (DG ENV, DG Enterprise, DG AGRI, DG DEV, ...) and various working parties and Committees (Standing Forestry Committee, FLEGT Committee, informal ad hoc working group on FLEGT and REDD). More coherence is needed. - From now on, it would be useful to prepare a progress report every other year.

Part III

Conclusions and questions for consideration

The views expressed herein can in no way be taken to reflect the official opinion of the European Union.

Part III – Conclusions and questions for consideration

The Communication which launched the Action Plan describes it as: “the start of a process which places particular emphasis on governance reforms and capacity building, supported by actions aimed at developing multilateral cooperation and complementary demand-side measures designed to reduce the consumption of illegally harvested timber in the EU (and ultimately major consumer markets elsewhere in the world)”.

The Action Plan is more than a statement of policy but, in the absence of milestones and targets, it is less than a strategy. It departs from traditional forms of development assistance in a number of ways. First, it links development with trade and goes beyond relationships with governments to work with civil society in the broadest sense. Second, it requires domestic actions by MS themselves. Third, negotiation of partnership agreements, and identification of the actions which partners will take, precedes discussion of development assistance. The actions identified to improve law enforcement, governance and trade reflect the circumstances of, and negotiated outcomes between stakeholders of each partner country, not a preconceived notion of what is right.

In these circumstances, and given that the EU responds to expressions of interest from partner countries, the Action Plan is more of a political process than a traditional aid programme. While that permits intelligent adaptation to a range of very different, and changing, circumstances it also makes such work more difficult to plan and to monitor.

This section summarises the conclusions that can be drawn from the responses to the questionnaire and identifies issues for consideration in the design and implementation of future work.

Conclusions

1. A lot of sustained energy, enthusiasm and money have been directed at the FLEGT Action Plan.

2. Interest in VPAs has grown rapidly and there has been steady, but slow, progress in discussing, negotiating and implementing them.

3. There has been considerable innovation in responding to demand in terms of staffing and financing but demands exceed the capacity to respond to them all.

4. There has been a clear shift in market sentiment in the EU (and, though the questionnaire doesn’t tell us this directly, beyond the EU) with determined efforts by a significant part of the private sector to clean up their supply chains.

5. Public procurement policies have contributed significantly to this shift in sentiment and practice, even though a majority of Member States don’t have such policies and only limited progress has been made in harmonising the policies that do exist.

6. The application of existing legislative instruments proved fruitless but adoption of the EU Timber Regulation, even though it has yet to come into force, has accentuated this market shift. This new Regulation, once effective, will have implications for the public procurement policies of Member States.

7. Little work has been undertaken in terms of greater due diligence over finance and investment decisions which affect forests.

8. The concept of conflict timber proved too difficult and too contentious and did not take hold.

9. The questionnaire doesn’t tell us this directly, but it appears that the scale of the global response to illegal logging and poor forest governance over the last decade – and the role of FLEGT within this, is not well understood. Item 45 of the appended chronology of key documents (see Annex IV) cites the 2010 assessment of this global response. Although the magnitude of the problems facing forests remains daunting, encouragement should be taken from the scale of what has already been achieved.

10. Member States (and others) have different understandings and expectations of the Action Plan. This is partly a consequence of insufficient investment in communications but it is mainly a reflection of the complexity of the issues and differences in motivation. All Member States are affected by the demand-side measures taken by the EU to regulate trade in timber but a majority of Member States are not involved in supporting supply-side measures in developing countries.

11. Only a minority of Member States have been actively engaged in the Action Plan in terms of committing money and people but a larger number of Member States say they are prepared to provide support in the future. Importantly, however, some see the Action Plan as the responsibility of the European Commission and not as a true collaborative effort.

12. Finally, a majority of Member States think that the FLEGT Action Plan has been partially implemented and is producing results or promising to do so. Not all aspects of the Action Plan have progressed at the same rate and the message conveyed in the responses to the questionnaire is ‘continue and expand’.

Reflections on progress to date

13. The focus on legality is seen by developing countries as reinforcing their national sovereignty rather than detracting from it, as some other initiatives have been perceived to do. This is a great strength. It allows discussion of sensitive governance issues such as corruption which were formerly taboo.

14. Working with the private sector and harnessing the power of the market changes the dynamic of the debate about forests and governance.

15. By linking demand-side and supply-side measures the EU demonstrates good faith, showing that it is willing to change its own behaviour and not just demand that other countries change their behaviour.

16. Separation of the discussion of governance reforms from the discussion of financial assistance changes the nature of the relationship between the EU and developing countries. Negotiation between donor and beneficiary changes into a political dialogue between more equal partners.

17. The legally binding bilateral treaty nature of VPAs introduces a status that attracts key actors from beyond the forest sector whose engagement is essential if the status quo is to be challenged. In doing so it also raises the profile of the sector.

18. Patient support for genuinely inclusive (and therefore inevitably slow) national multi-stakeholder processes helps to deal with difficult deep-rooted governance issues that earlier initiatives have failed to influence.

19. Coalitions of interest involving representatives from governments, NGOs and the private sector create opportunities and help to maintain momentum in ways that none of the parties could do alone.

Questions for consideration in reflecting on future implementation of the FLEGT Action Plan

20. The Action Plan arose out of concern about illegal logging in tropical high forests. However, there are governance challenges beyond illegal logging in these forests. The trend away from dependence on natural forests to investment in plantations is well advanced, especially in Asia, but also in Latin America, and will become much more important in Africa within the next decade. To the extent that plantations usually have clearer property rights than natural forests (though experience shows that they are not always acquired fairly or legally) and represent significant investments which their owners want to protect, some aspects of legality may be less important in these forests than they are in natural forests. However, other governance issues are likely to manifest themselves in different ways in different places: land grabbing, conversion of forests without due legal process and the conflicts these raise with local livelihoods. The Action Plan, with its emphasis on nationally-driven, broad-based, governance reforms can be of value in dealing with these other governance challenges.

21. Many things have changed in the world since the Action Plan was launched in 2003. The global trends which Member States consider to be most important are: climate change and REDD; the Lacey Act amendment; shifts in the patterns of demand for timber and in the centres of processing; and, increasing competition for land to produce food and fuel as well as fibre.

22. Each of these trends, and others identified by Member States, has implications for the Action Plan. A number of questions arise when considering the conclusion to continue and expand the Action Plan. It may be helpful to categorise them in terms of: purpose and scope of engagement; geographical scope; ways of working and financing; positioning and communicating.

Purpose and scope of engagement 23. Given the importance of climate change, should the Action Plan expand beyond legality associated with timber to that associated with conversion of forests to other land uses, such as agricultural production or mining?

24. Do the lessons learned from application of demand-side measures to timber have relevance for other commodities?

25. What attention should be paid to public procurement policies for timber once the EU Timber Regulation is operational?

26. Should financial due diligence focus more on revenue capture and benefit sharing arrangements, which REDD will make even more important than before, and less on commercial forestry investments?

Geographical scope 27. The level of demand for VPAs and the evidence of impact to date argue for a much bigger Action Plan. Demands for support to VPAs already exceed the capacity to respond to them all and some Member States also wish to work with neighbourhood countries (Belarus, Russia and Ukraine) or

regions (Western Balkans) which account for a larger share of their trade than tropical developing countries. How should geographical priorities be defined? How should development aims, political objectives, legal obligations and constraints, operational realities and value for money (relative return on investment) be reconciled if they do not all point in the same direction?

Ways of working 28. The Action Plan is an excellent example of policy coherence, collaborative working and donor harmonisation in forest sector development assistance but it falls short of its potential and short of the commitments donors have made to harmonisation of development assistance.

29. Most Member States only engage in FLEGT to meet the legal obligations introduced by the Action Plan. Only eight have been actively involved in support to VPAs. The origin of timber imports and international development policy are important determinants of the nature of a Member State’s engagement in the Action Plan. How can the number of Member States that contribute staff and money be increased to achieve the potential that exists and respond to the political imperative that the public and political attention now given to forests represents?

Positioning and communicating 30. The argument that the success of REDD is dependent on governance reforms as well as incentive mechanisms has now been widely accepted. If FLEGT and REDD are complementary, as the EC and Member States believe, how should the Action Plan be planned and implemented in the future?

31. How can the Action Plan be communicated more effectively to different audiences?

Annexes

The views expressed herein can in no way be taken to reflect the official opinion of the European Union.

Annex I: Questionnaire

The questionnaire below was used for collecting information from EU Member States. A very similar but slightly different version was used for collecting information from the European Commission, to take account of the fact that a number of questions are not relevant to the EC or need slight reformulation to be made relevant.

FLEGT ACTION PLAN PROGRESS REPORT QUESTIONNAIRE FOR EU MEMBER STATES

Member State on behalf of which this questionnaire is compiled: ......

Name(s), department, function and e-mail address of main respondent(s):

Lead respondent: First & last name: ...... Department/Agency: ...... Function: ...... E-mail address: ......

Other key contributor (1) (Optional) First & last name: ...... Department/Agency: ...... Function: ...... E-mail address: ......

Other key contributor (2) (Optional) First & last name: ...... Department/Agency: ...... Function: ...... E-mail address: ......

Other key contributor (3) (Optional) First & last name: ...... Department/Agency: ...... Function: ...... E-mail address: ......

Please provide a brief description of the FLEGT-related institutional setup in your country (e.g. who is involved – government, private sector, non-governmental organisations, ... – in what types of action in support of FLEGT, whether a central ‘FLEGT coordinating unit’ has been set up, whether specific structures are in place to keep track of progress on FLEGT and other efforts to tackle illegal logging and improve forest governance in third countries).

Reminder: Main objectives of the FLEGT Action Plan - Area #1 – Support to timber producing countries: partner countries receive support to address illegal logging in a just and equitable manner; this support helps them develop timber legality assurance systems, increase transparency in forest management, build their capacities with regard to all aspects of forest governance, and implement the policy reforms needed to tackle illegal logging. - Area #2 – Trade in timber: through the implementation of licensing schemes, the EU imports only legally produced timber/timber products from FLEGT partner countries, and over time the volumes of illegal timber/timber products entering the EU market are significantly reduced; a multilateral framework is established for international collaboration on tackling the trade in illegal timber, and if necessary additional legislation is adopted to prevent the import and marketing of illegal timber/timber products. - Area #3 – Public procurement: EU Member State public procurement policies promote the use of sustainable and verified legal timber/timber products. - Area #4 – Private sector initiatives: initiatives in favour of sustainable forest management and the use of legal timber/timber products are encouraged, both in the EU and in FLEGT partner countries. - Area #5 – Financing and investment: EU-based banks and financial institutions that lend to or invest in the forest sector incorporate environmental and social as well as legality aspects in their due diligence assessments. - Area #6 – Use of existing legislative instruments: money laundering and other legislation is used to combat imports and use of illegally harvested timber and derived products. - Area #7 – Conflict timber: a framework for addressing the issue of conflict timber is set up.

PART I – ACTIONS TAKEN IN IMPLEMENTING THE FLEGT ACTION PLAN

FLEGT AP AREA #1: SUPPORT TO TIMBER PRODUCING COUNTRIES / VPAS

AREA #1.A. SUPPORT TO PARTNER COUNTRY(IES) IN VOLUNTARY PARTNERSHIP AGREEMENT (VPA) PREPARATION AND NEGOTIATION

Q1 A. Has your country given in-kind technical support to one or several FLEGT partner country(ies) for the preparation, negotiation and/or implementation phases of any VPAs?

○ Yes (1) ○ No (2)

B. If so, which partner country(ies) is or are concerned? Please specify.

C. And if so, in what form what this support provided?

○ Occasional technical contributions (short-term assistance) (1) ○ Posted one or several experts/officials for a period of at least 3 months (2) ○ Both (3)

Q2 A. Has your country provided financial support to one or several FLEGT partner country(ies) for the preparation, negotiation and/or implementation phases of any VPAs?

○ Yes (1) ○ No (2)

B. If so, please indicate the type of action concerned. (Several boxes may be checked here if more than one answer is relevant.)

○ Support to VPA country administration in negotiating/implementing VPA (1) ○ Institutional strengthening and regulation of forest management in VPA countries (2) ○ NGO advocacy and capacity building in VPA countries (3) ○ Private sector initiatives in VPA countries (4) ○ Research and think tank initiatives on VPAs (in Europe and/or VPA countries) (5) ○ Other (to be specified in the appendix to the questionnaire) (6)

Please report the action(s) concerned in the appendix to this questionnaire.

Q3 [Optional] Would you like to provide any additional information or comments with regard to support provided so far to partner countries in relation to VPA preparation and negotiation? If so, please use the space below.

AREA #1.B. SUPPORT TO THE COMMISSION IN VOLUNTARY PARTNERSHIP AGREEMENT (VPA) NEGOTIATION

Q4 A. Have representatives from your country (officials, diplomats or development agency staff, from headquarters, Embassies or local representation offices) participated in the negotiation of any VPAs?

○ Yes (1) ○ No (2)

B. If so, in which country(ies)? Please specify.

Q5 A. Has your country appointed any government staff to support the Commission in VPA negotiation? (In answering this question, please consider only the appointment of staff for a period of at least 3 months. Occasional contributions are outside the scope of this question.)

○ Yes (1) ○ No (2)

B. If so, in which country(ies) or region(s)? Please specify.

C. If so, for how long overall during the 2003-2010 period? (Add up numbers if more than one person or more than one period is concerned.)

...... person-month full-time equivalent (...)

D. And if so, what is or was the organisational setup? (Several boxes may be checked here if more than one answer is relevant.)

○ Secondment to the Commission (1) ○ Secondment to EFI (2) ○ Work from within own department/agency (3) Q6 Has your country provided/financed technical expertise (consultants) to support the Commission in VPA negotiation?

○ Yes (1) ○ No (2)

If so, please report the action(s) concerned in the appendix to this questionnaire.

Q7 [Optional] Would you like to provide any additional information or comments with regard to support provided so far to the Commission in relation to VPA preparation and negotiation? If so, please use the space below.

AREA #1 – OVERALL

Q8 A. Beyond 2010, does your country plan to maintain or develop actions in support of VPA preparation, negotiation and/or implementation? (Several boxes may be checked here if more than one answer is relevant.)

○ Yes – in support of partner countries (1) ○ Yes – in support of the European Commission (2) ○ Yes – through multilateral initiatives (e.g. EFI, FAO) (3) ○ No (4)

B. If so, in which or in relation to which country(ies) or region(s)? Please specify.

C. [Optional] Would you like to provide any additional information or comments with regard to planned future support to VPA preparation, negotiation and/or implementation? If so, please use the space below.

FLEGT AP AREA #2: TRADE IN TIMBER

Q9 Which parts of your government were involved in the negotiation of the FLEGT Regulation (2005) and the Illegal Timber Regulation (formerly known as ‘due diligence’) (2010)? Please specify.

Q10 Which institution in your country is the ‘competent authority’ designated to receive, accept and verify FLEGT licenses, according to the terms of the FLEGT implementation regulation (2008)? Please specify.

Q11 A. Have any studies been undertaken, upon initiative of your government or other organisations in your country, on the consequences/impacts of the FLEGT Regulation (2005) and/or the Illegal Timber Regulation (2010)?

○ Yes (1) ○ No (2)

If so, please report the action(s) concerned and provide key references in the appendix to this questionnaire.

B. If so, what is or was the focus of the study(ies)?

○ Consequences for timber/timber product importing countries (1) ○ Consequences for timber/timber product producing/processing countries (2) ○ Both (3)

Q12 A. Has your government engaged in any multilateral, regional or bilateral initiatives with non-EU timber consumer countries to advance a multilateral framework to improve forest law enforcement, governance and associated trade?

○ Yes (1) ○ No (2)

B. If so, please provide a brief description below.

Q13 How do you think the Illegal Timber Regulation is going to affect/influence trade in timber? Do you expect any specific impact on VPAs? Please specify briefly below.

Q14 [Optional] Would you like to provide any additional information or comments with regard to trade in timber? If so, please use the space below.

FLEGT AP AREA #3: PUBLIC PROCUREMENT

Q15 A. Has your government already adopted a procurement policy for timber/timber products?

○ Yes (1) ○ No (2)

B. If so, what is the main focus of your procurement policy?

○ Legal origin (1) ○ Legal compliance with regard to ecological, social and/or economic criteria (2) ○ Sustainability (3)

C. And if so (positive answer to Q15A), does it specifically recognise and will it favour FLEGT- licensed timber/timber products once they are in the market?

○ Yes (1) ○ No (2)

D. If it does not/will not specifically recognise/favour FLEGT-licensed timber/timber products, what is or what are the reason(s) for this? Please explain briefly.

Q16 A. If your government has not yet adopted a procurement policy for timber/timber products, does it have plans to do so?

○ Yes (1) ○ No (2)

B. If not, what is or what are the reasons for this? Please explain briefly.

Q17 A. If your government does have a procurement policy for timber/timber products in place, has it already assessed its effectiveness?

○ Yes (1) ○ No (2)

B. If so, please summarise the main conclusions of the assessment – also specifying whether the assessment has led to any revisions or policy changes.

Q18 A. To your knowledge, are there local authority initiatives with regard to timber/timber product procurement in your country?

○ Yes – in the context of implementation of the national procurement policy (1) ○ Yes – independently from any national procurement policy (2) ○ Yes – both in the context of implementation of the national procurement policy and at the initiative of some local authorities (3) ○ No (4)

B. If so, does your government monitor such initiatives?

○ Yes (1) ○ No (2)

Q19 A. Does your country use or consider using other instruments to promote the use of legally and/or sustainably produced timber?

○ Yes (1) ○ No (2)

B. If so, please specify below.

FLEGT AP AREA #4: PRIVATE SECTOR INITIATIVES

Q20 A. Has your government worked with the private sector (awareness raising, dissemination of information, technical support, financial support, ...) to advance the aims of FLEGT within your country?

○ Yes (1) ○ No (2)

B. If so, which type of private sector organisations were involved? (Several boxes may be checked here if more than one answer is relevant.)

○ Individual companies (1) ○ Business federations / trade associations specifically involved in the processing and/or distribution and sale of timber / timber products (2) ○ Other business federations / trade associations (3) ○ Other – please specify: ...... (4)

If so and this collaboration involved financial support, please report and shortly describe the action(s) concerned in the appendix to this questionnaire.

C. If so but this collaboration did not involve financial support, please provide a brief description here:

Q21 A. Has your government worked with the private sector (awareness raising, dissemination of information, technical support, financial support, ...) to advance the aims of FLEGT in FLEGT partner countries?

○ Yes (1) ○ No (2)

B. If so, which type of private sector organisations were involved? (Several boxes may be checked here if more than one answer is relevant.)

If so and this collaboration involved financial support, please report and shortly describe the action(s) concerned in the appendix to this questionnaire.

C. If so but this collaboration did not involve financial support, please provide a brief description here:

Q22 A. To your knowledge, have changes in the policies and/or practices of the private sector in your country taken place as a result of FLEGT?

○ Yes (1) ○ No (2)

B. If so, please provide a brief description.

If any important studies have been undertaken in your country to detect and analyse changes in the trade of timber/timber products as a result of FLEGT, please provide references in the appendix to this questionnaire.

Q23 [Optional] Would you like to provide any additional information or comments with regard to private sector initiatives and response? If so, please use the space below.

FLEGT AP AREA #5: FINANCING AND INVESTMENT

Q24 A. Has your government worked with banks and other financial institutions to encourage greater scrutiny in forest sector investments?

○ Yes (1) ○ No (2)

If so and these promotion efforts involved financial support, please report and shortly describe the action(s) concerned in the appendix to this questionnaire.

B. If so but these promotion efforts did not involve financial support, please provide a brief description here:

Q25 A. To your knowledge, is there any evidence that banks and other financial institutions in your country, including export credit agencies, have changed their policies and practices to encourage better forest governance and discourage illegal logging in other countries?

○ Yes (1)

○ No (2) B. If so, please describe briefly:

Q26 [Optional] Would you like to provide any additional information or comments with regard to financing and investment practices, and/or changes in the level or destination of investment in the forestry and forest industry sector abroad? If so, please use the space below.

FLEGT AP AREA #6: SUPPORTING THE AP WITH EXISTING LEGISLATIVE INSTRUMENTS

Q27 A. Has your government carried out work to establish which domestic legislation for money laundering is applicable to forest sector crimes?

○ Yes (1) ○ No (2)

B. If so, what conclusions were drawn, and how have they been communicated to financial institutions and enforcement agencies? Please describe briefly.

Q28 Has your government provided technical and/or financial assistance to timber producing countries to deal with forest-related money laundering?

○ Yes – Technical assistance (1) ○ Yes – Financial assistance (2) ○ Yes – Both technical and financial assistance (3) ○ No (4)

If so and any financial support was provided, please report and shortly describe the action(s) concerned in the appendix to this questionnaire.

Q29 A. Has your government reviewed how other legislation might be used to tackle forest- related crimes?

○ Yes (1) ○ No (2)

B. If so, what conclusions were drawn from this review, and have any specific initiatives emerged as a result? Please describe briefly.

Q30 [Optional] Would you like to provide any additional information or comments with regard to legislative instruments? If so, please use the space below.

FLEGT AP AREA #7: CONFLICT TIMBER

Q31 A. Has your government taken and/or supported any initiative in relation to conflict timber, including matters related to the rights to forests of local and indigenous communities?

○ Yes (1) ○ No (2)

If so and the action(s) involved financial support, please report and shortly describe them in the appendix to this questionnaire. B. If so but no funding was provided, please specify briefly here:

Q32 [Optional] Would you like to provide any additional information or comments with regard to conflict timber? If so, please use the space below.

PART II – FURTHER QUESTIONS ABOUT THE FLEGT ACTION PLAN

Q33 A. In your opinion, which aspects of the FLEGT Action Plan are achieving results? (Several boxes may be checked here.)

○ Area #1 – Preparation/Negotiation of Voluntary Partnership Agreements and related aspects (e.g. forest governance, timber legality assurance systems, transparency and participation, ...) (1) ○ Area #2 – More responsible trade in timber (2) ○ Area #3 – Supportive public procurement policies (3) ○ Area #4 – Supportive private sector initiatives (4) ○ Area #5 – Due diligence in financing and investment (5) ○ Area #6 – Use of money laundering and other legislative instruments (6) ○ Area #7 – Initiatives related to conflict timber (7)

B. Please explain briefly, highlighting the most important aspects in your view:

Q34 A. In your opinion, which aspects of the FLEGT Action Plan are not achieving results and/or have not received enough attention? (Several boxes may be checked here.)

B. Please explain briefly, highlighting the most important aspects in your view:

Q35 Overall, how advanced do you think the implementation of the FLEGT Action Plan is?

○ The AP is fully implemented and delivering good results (1) ○ The AP is fully implemented but needs modification to deliver good results (2) ○ The AP is partially implemented, but already delivering good results – keep it up (3) ○ The AP is partially implemented and promises to deliver good results in the future – stick with it (4) ○ The AP is partially implemented and needs modification to deliver good results (5) ○ The AP time has passed – a new policy is required (6) ○ The AP implementation has not been satisfactory (7)

Q36 What are, in your opinion, the observable direct outputs and outcomes of the FLEGT Action Plan (i.e. those that can be clearly attributed to it)? Please specify briefly.

Q37 In your opinion, what have been the main changes and trends since the adoption of the FLEGT Action Plan which have implications for forest law enforcement, governance and trade?

A. Emergence of China and other developing/emerging countries as globally important wood processing centres: