Lumbering illegality: how to make timber sustainable and pro-poor

The European Union is closing its doors to illegal timber exports. But unless we tackle unsustainable logging to satisfy domestic timber markets, their actions will little benefit forests, or the millions of poor people that live within them. Making timber sustainable requires the use of both trade and climate strategies in unison to bring about locally controlled forestry.

A recent report launched by Chatham House states that illegal logging in Cameroon, the Brazilian Amazon and Indonesia has fallen over the past decade by 50–70 per cent, saving 17 million hectares of forest and 1.2 billion tonnes of carbon dioxide. If it is replaced by legal logging, this decrease could also generate US$6.5 billion in extra government revenues.

These countries’ success is attributed in part to their actions to combat the illegal timber trade. So it was no surprise that the report found a receptive audience at the 6th annual coordination meeting of the EU Forest Law Enforcement Governance and Trade (FLEGT) action plan in Brussels last week (12–14 January 2011).

Saying no to illegal exports

The action plan uses a mix of government, private sector and civil society supply and demand side actions to exclude illegally logged timber products from EU markets and improve timber ‘legality’ — supporting national sovereignty on what is or is not legal.

But if using market leverage towards legal timber is the entry point, governance reforms toward pro-poor sustainable forestry is embedded in the subtext. FLEGT has also sponsored patient participatory negotiations between all forest stakeholders to challenge definitions of legality, work out how to make legality fair, and bring the more ambitious end of pro-poor sustainable forestry about. The rationale is simple — unless legality is fair, sustainability is unlikely.

The EU FLEGT action plan focuses on using binding Voluntary Partnership Agreements (VPAs) between the EU and partner countries to combat illegal logging and associated trade. Under a VPA, only timber products that have been legally produced will be granted an FLEGT license and given access to EU markets. Three VPAs have been ratified between the EU and Ghana, Cameroon and Congo, with Central African Republic on its way. While no FLEGT-licensed timber has yet been traded, Mathieu Bousquet of the European Commission assured the Brussels meeting that “this is the year of the licence!”

And the net is widening. VPA negotiations are ongoing in several other countries, including forest juggernauts such as the Democratic Republic of Congo and Indonesia and processing centres such as Vietnam.

Will it help the poor?

But how will tightening the noose on illegal timber affect forests and the poor who live within them? For most countries negotiating VPAs, export timber is only a small fraction of the market, dwarfed by small-scale lumbering to meet rising in-country demand for timber.

These domestic markets involve countless axe and chainsaw loggers who often operate unsustainably, informally or illegally. There are an estimated 97,000 in Ghana alone, supporting hundreds of thousands more in families of the forest-dependent poor. A follow-on meeting in Brussels, organised by Tropenbos, on 17–18 January heard that while illegal timber exports may be falling, prospects are none to bright for the small and medium forest enterprises that form the mainstay of timber production in many tropical countries.

The long-term fate of the forest and timber trade depends on what deal is negotiated for these denizens of the domestic market. Shutting them down without recompense through a VPA would be political suicide. But tackling domestic legality issues strays far from the FLEGT focus on timber exports to the EU.

Sorting out domestic markets

So it is with some relief that VPAs are not the only show in town. The agreement for Reducing Emissions from Deforestation and forest Degradation (REDD), agreed at last month’s UN climate talks in Cancun, is at heart an environmental payment mechanism rather than a trade agreement. But if REDD can also focus on the governance reforms needed for long term forest sustainability (without trampling on the fora and processes painstakingly developed through VPAs and vice versa), it may be possible to address these domestic market issues.

So how can the domestic market be ‘legalised’? Participants at the Tropenbos meeting agreed some key priorities, of which I will highlight three:
(i) invest in the federation of different small forest enterprises so that they can be adequately represented in FLEGT and REDD agreements and strategies;
(ii) use FLEGT and REDD processes to negotiate clear and secure commercial timber rights for these federations, providing local people, who already have the ability to enforce the law, with a commercial incentive to do so; and
(iii) establish FLEGT or REDD sponsored business and microfinance support agencies to ensure that small forest enterprises serving the domestic market are professional, profitable and sustainable.

In short, FLEGT and REDD can work in unison to bring about locally controlled forestry — a precondition to both enforceable legality and long-term forest sustainability, and our theme for this UN International Year of Forests.