By early 2014, all shipments of wood products to the European Union from Liberia will be required to carry a license certifying their legal origin. A Voluntary Partnership Agreement (VPA) to that end was signed on 9 May by the EU and Liberia, which contains over half of the remaining rainforest in West Africa. This agreement, made in Monrovia, underpins Liberia’s ongoing forestry reforms, driven by the Government's commitment to good governance and to ensuring that natural resources contribute to sustainable development. The agreement also gives European consumers the assurance that wood products imported from Liberia, including furniture and wood chips used for bio-fuel, are of legal origin. The Agreement comes in result of the strong mutual commitment to eradicate illegal logging and to bring more transparency to the timber trade.
European Commissioner for Development Andris Piebalgs said: I am pleased to see that yet another country joins our common fight against illegal logging. This commitment will contribute to sustainable development and poverty alleviation in Liberia on the one hand, and will benefit the European consumers because they can be sure that Liberian wood is legal.”
Florence Chenoweth, Minister in charge of forestry and agriculture in Liberia and Lluis Riera, Director in the European Commission, the lead negotiators, initialled the Agreement in the presence of President Sirleaf Johnson and EU Ambassador Pacifici. It is the sixth in a series of bilateral accords that are negotiated between the EU and timber producing countries (agreements have been agreed most recently with Indonesia, Central Africa Republic, Cameroon, the Republic of Congo and Ghana).
Under the agreement, Liberia intends to set up a national system to ensure legal compliance in timber production, covering all wood products destined for the EU as well as those sold on the domestic market and to non-EU markets. The EU at the same time will guarantee unrestricted access to its market for all wood products coming from Liberia. These stronger control systems will also enable Liberia to stop illegal deforestation and environmental degradation that contribute to climate change.
Globally, between 20% and 40% of industrial wood production, valued at an estimated $10 billion a year is derived from illegal sources, and up to 20% finds its way into the EU.
Illegal logging was rampant during Liberia's prolonged civil war in the 1990s and timber revenues were used to sustain the conflict. The World Bank estimated that corruption linked to the industry may have cost Liberia as much as half the entire country’s budget, evading payments of an estimated $200 million. This led to the UN Security Council to impose sanctions on all timber exports from Liberia in 2003.
Since then, Liberia has made significant efforts to reform the sector. This included a comprehensive reform of the law, development of a national timber traceability system to track timber production and payment of revenues and institutional reform. Liberia was the first country to include timber revenues under the Extractive Industries Transparency Initiative (EITI) and was the first African country to achieve EITI compliance in 2008. In recognition of the progress made, the UN lifted sanctions in 2006, opening the way for Liberia to rebuild its forest sector. The VPA partnership with the EU aims to strengthen these efforts: to strengthen governance and law enforcement and, through a licensing system, provide assurance that its timber has been legally produced.
Timber exports once accounted for more than 20% of Liberia’s Gross Domestic Product (GDP) and EU countries were a major destination for Liberia’s timber accounting for more than half of exports in 2003.
The Forest Law Enforcement, Governance and Trade VPA provides a way by which Liberia can simultaneously address illegal logging, improve management and strengthen market opportunities for its timber products. This trend is reflected in new legislation in the EU and US that prohibits the sale of illegally harvested timber and products made from illegal timber. Other consumer markets are expected to follow, making legality verification an important part of the global marketing of timber products.
Negotiations of the agreement between Liberia and the EU started in 2009 and have actively engaged civil society, community and private sector representatives. A national wood traceability system is already in place and will be further developed to meet the more comprehensive requirements.
Frequently asked questions on illegal logging
What is the Commission doing to combat illegal timber products to appear on the EU market?
The Commission is actively working with developing countries that produce timber for the EU market to ensure that they have the system and capacity in place to tackle illegal logging. The Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan is a top priority for the EU. It dates back to 2003. The Regulation was adopted in 2005, and the Commission started the first Voluntary Partnership Agreement (VPA) negotiations in 2006. Negotiations of VPAs take time. They rely on a wide consultation process on sensitive issues, such as land tenure, governance, transparency and accountability. There is now one agreement ratified (with Ghana), three in ratification process (Indonesia (initialled May 4), Central African Republic, Republic of Congo and Cameroon), negotiations on-going (Malaysia, Democratic Republic of Congo, Vietnam and Gabon) and a number of countries have expressed their interest for entering into negotiations.
However, VPAs are not likely to cover all countries from whom we import timber, and our partner countries are concerned about unfair competition with those who continue to trade unknown sources of timber product. Hence the EU adopted legislation in 2010 to change business behaviour and to stop our indiscriminate consumption of forest products. The EU Timber Regulation ensures that the EU does not as a market for illegally harvested timber as it will require EU operators to trade in timber from known legal sources. This coupled with the already enacted US legislation which has a similar purpose will send an important signal worldwide and encourage more timber producing countries to establish systems to verify legal compliance.
Does the Commission support developing countries in their forest sector reforms?
The main purpose of the VPA is to support the reforms and policies of timber producing developing countries. In galvanising the interest in EU consumer markets to reinforce and back government reforms, this brings added strength to these programmes. The European Commission and Member States are also, through our bilateral development assistance helping countries establish the capacity for better forest governance.
From 2002 - 2008, the Commission contributed about €544 million to work with developing countries on forestry. There is no decrease in global terms of the support to forestry in our development cooperation.
The EU together with Member States support the implementation of VPAs through our regular bilateral aid channels and to date the necessary finance has been programmed for this purpose.
Support to forestry is framed through different budget instruments, from thematic programmes and geographical national programmes. However it has to be noted that forestry and natural resources management are rarely one of the focal areas of national indicative programmes as established by partner governments. Because of their role in climate change adaptation and mitigation, it is possible that more activities related to forests will be financed under the national programmes in the near future. In terms of geographical coverage, about €220 million targeted in African countries, €158 million in South America and €55 million Asia.
Now there will be an EU-wide regulation on timber, why are VPAs still necessary? What is the link between a VPA and the new Regulation?
The VPA addresses the problem of illegal logging at its source, it helps create the governance structures that reinforce capacity for law enforcement and oblige companies to respect the law. The VPA also will help countries and their operators meet the market expectations for more information and evidence of legal compliance.
VPA partner countries do not want unfair competition with timber coming from countries that do not take seriously combating illegal logging. They welcome the EU Timber Regulation, and welcome the recognition this legislation makes of FLEGT timber. It assures them that their operators will not be jeopardized by illegal timber from other countries.
Forests play a significant part in climate change: what is the Commission doing to stop deforestation and to put in place effective incentives for developing countries to stop deforestation and forest degradation?
Deforestation and forest degradation account for close to 20% of global emissions, more than the entire global transport sector. Rapid and significant emissions reductions from reduced deforestation and degradation (REDD) are essential to avoid global warming above 2°C. The 2008 EC Communication on deforestation underscored the importance of positive incentives to encourage developing countries to reduce emissions from deforestation. The EC is supporting the development of REDD strategies through country specific development assistance as well as supporting international efforts such as the Forest Carbon Partnership steered by the World Bank.
The European Commission contributes to a broad range of REDD-related initiatives and projects in many developing countries, being at local, national or regional levels. The total amount of funds already committed or in the pipeline for the period 2007-2013 reaches €420 million in more than 40 countries, of which €220 million (52%) correspond to ongoing projects financed under 2007 to 2009 budget years and €200 million (48%) still to be committed for the period 2010-2013.
What are the links between Forest governance (FLEGT) and climate change (REDD)?
The governance and market failures which drive illegal logging are much the same as those that drive deforestation. The constraints to tackling deforestation are the same as those we face in tackling illegal logging: unclear and contested tenure of land and forests, lack of institutional capability, weak regulatory capacity, and corruption. FLEGT and REDD both require multi-stakeholder processes that build a shared commitment; systems for monitoring, reporting and verification that are credible; buyers who have confidence in the products they are paying for. Thus, key to tackling deforestation is establishing good governance and FLEGT can help to achieve this.
FLEGT partnerships can assist forested countries in meeting REDD policy goals. FLEGT aims to enhance the overall governance, transparency and law enforcement of the forest sector in order to make sure that timber production takes place in accordance with the laws and regulations of a country. REDD aims to create incentives to halt deforestation. A future REDD mechanism will require clarity over land and forest ownership and use rights as well as the capacity to prevent indiscriminate and illegal logging. The VPA process helps to clarify forest related legislation and identify the roles of different government institutions and private sector bodies. It also enables countries to address underlying problems. In doing so, it enhances forest law enforcement and assists countries in putting their forest sectors on a more sustainable footing.