kerstin canby

Consumer Goods and Deforestation Analysis of Extent and Nature of Illegality in Forest Conversion for Agriculture and Timber Plantations

5th PEFC Stakeholder Meeting 20 November 2014

Kerstin Canby Forest Trade & Finance Forest Trends

Outline

• Consumer Goods and Deforestation Report • Summary of report findings

• Methodology

• Conversion Timber

• Agricultural Commodities

• Update on China and Greater Mekong region

Results: Summary

11/20/2014

* Midpoint estimates used in sensitivity analyses *

Illegality in major countries

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Scope of Impact

Deforestation: 21m ha of tropical forests illegally cleared 2000-2012 in order to supply agro-commodities for export

Climate change: Emissions from illegal deforestataion from commercial agriculture average 1.47 gigatonnes CO2 per year – equivalent to ¼ EU’s annual fossil fuel-based emissions

Trade: Value of agro-commodities produced on land illegally converted from tropical forests estimated at $61 billion / year. Largest buyers: EU, China, India, Russia, US

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Results: Sensitivity analysis

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Results: Commodity exports

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Definition of Legality / Illegality

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Legality determined by laws & regulations of producer countries, at the time of deforestation

Illegalities of past 20-30 years only, directly or indirectly caused by commercial agriculture

Does not include international commitments (ILO 169, UNDRIP, etc)

Does not include customary rights unrecognized by statutory law

Definition of Legality / Illegality

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Only focuses on violations with large impact Issuing of licenses / permit Corruption / bribery Example PNG: Parliamentary Inquiry found 90% Special

Agriculture and Business Leases (SABLs) obtained through corrupt/fraudulent means

Clearance No permit, permit non-compliance, in advance of permit Clearance in prohibited zones Failure to compensate affected communities

Conversion Timber

• Tropical timber in global markets being sourced from land clearance projects

• 13% low 31% medium 49% high scenario

• Role of conversion timber in the profitability of agricultural development projects

• Are the legality issues different from conventional forest concessions?

• More emphasis on early processes of land acquisition, auctions, permitting, degazetting of forest estate

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Conversion Timber

• Mechanisms designed to address illegal logging were designed in the 1990s and early 2000s before agricultural land boom

• Certification standards and legality verification schemes

• VPAs now focussing on this, or are being reviewed

• Engagement of agricultural ministries or land management

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Agricultural Commodities

• Calls to replicate FLEGT mechanisms for illegal agricultural commodities

• EUTR, Lacey, VPA processes

• Impatience with voluntary approaches (RoundTables, RSPO, voluntary Zero Deforestation commitments

• Very different dynamics politically • Fewer number actors, major multi-nationals who are producers /

traders / processors, more money, more political

• Private sector interest in asking governments to get their legal house in order > basic improvements in investment climate

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Agricultural Commodities

• Will the land be “forever illegal”? • Informal processes for conflict resolution

• Blanket amnesty

• Fines

• Offsets

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Outline

• Update on China and Greater Mekong region

China: timber product imports by volume and product type

0

20

40

60

80

100

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

m3

RWE

Mill

ions

Logs Sawnwood Wood chips Veneer sheet Charcoal

Particleboard Wood furniture Fiberboard Plywood Other

China: timber product exports by volume and product type

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0.0

10.0

20.0

30.0

40.0

50.0

60.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

m3

RWE

Mill

ions

Plywood Furniture Fiberboard Flooring Other Joinery Lumber Veneer Sheet

China: Rosewood Imports

0

100

200

300

400

500

600

700

800

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

otherDRCMozambiqueLao PDRMyanmarNicaraguaGhanaTogoBeninGambiaVietnam

Volu

me

100

0 m

3

China: Rosewood Furniture Exports

0

50'000

100'000

150'000

200'000

250'000

300'000

350'000

400'000

450'000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

otherFranceMacauUnited StatesHong KongTaiwanSingaporeJapan

Qua

ntity

China: Timber product imports by volume and source country

0

20

40

60

80

100

120

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

m3

RWE

Mill

ions

Russia Canada New ZealandVietnam United States ThailandEuropean Union Australia AfricaIndonesia Papua New Guinea Other

China: Hardwood log imports

0

2

4

6

8

10

12

14

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

m3

Mill

ions

Middle East/Central Asia

Other Oceania

Latin America/Caribbean

Other Asia

North America

Europe

Other Africa

Malaysia

Equatorial Guinea

Cameroon

Congo

Myanmar

Russia

Solomon Islands

Papua New Guinea

EU-27 timber imports by region and exposure to 3rd party verification (2011)

Includes all products in CN44 (wood) and wood products in CN94 (furniture). Based on FII Ltd/European TTF analysis of Eurostat and data derived from certification/legality system websites and Keurhout

Legality of China Wood Supply

• Illegal harvest not problem in domestic supply – main issue is rights of local people

• Bigger question: how to handle imports from high risk countries?

Legality of China Wood Supply

• Illegal harvest not problem in domestic supply – main issue is rights of local people

• Bigger question: how to handle imports from high risk countries?

Legality of China Wood Supply

• International laws (EUTR, US Lacey) are obliging traders to question government documents in countries that are unable or unwilling to enforce their own laws

• This is not in the draft China State Forest Administration Timber Legality Verification System

• Chinese Forest Management System has just been endorsement by PEFC this year

• Challenge – uptake of FMSystem linked to chain-of-custody and leading to on-label logo use

Vietnam – the next China

• Ministry of Industry and Trade, November 2014: temporary ban on import of logs and sawntimber from Laos and Cambodia starting Dec 8, 2014

Thank you Kerstin Canby

kcanby@forest-trends.org www.forest-trends.org