7 Questions and answers about illegal logging

The information in this chapter provides background information on illegal logging and associated trade issues. It also gives a selection of examples of work carried out by governments towards addressing concerns surrounding illegal logging and sustainable forest management (SMF). For more information, a number of links to websites that discuss illegal logging issues are listed on the MAF website at www.maf.govt.nz/forestry.

The following questions and answers are included in this section:

  • Introduction focus questions
    • What is illegal logging and associated trade?
    • What are some examples of illegal logging and associated trade?
    • What are the causes of illegal logging and associated trade?
    • What are the impacts of illegal logging and associated trade?
    • What is the global scale of illegal logging and associated trade?
    • What is the difference between sustainable forest management and legal logging?
    • What are some ways countries can work together to address the problem of illegally harvested or traded wood products?
    • What international initiatives exist to combat illegal logging?
    • What are some examples of New Zealand�s involvement in addressing illegal logging?
  • International focus questions
    • What are some ways countries can work together to identify legally harvested or traded wood products?
    • What about a multilateral agreement on illegal logging?
    • Why do we want greater streamlining of processes, isn�t more better?
  • Regional focus questions
    • How can we work to achieve greater sharing of information in the region?
    • What is FLEG?
  • Bilateral focus questions
    • What projects have we funded through ITTO?
    • What types of bilateral arrangements exist to help combat illegal logging and associated trade?
    • What can we do within future free trade agreement negotiations to address concerns about illegal logging and associated trade?
  • New Zealand focus questions
    • Can New Zealand really make a difference?
    • What is the New Zealand Government Timber Procurement Policy?
  • Consumer focus questions
    • Does illegal logging and associated trade occur in New Zealand?
    • What can consumers do to help combat illegal logging and associated trade?

MORE QUESTIONS?

You may have more questions about our intended approach, need more background material or need other information relating to illegal logging and associated trade. Our website features the following questions and answers related to this issue:

  • What is the UNFF and how could it contribute to solving this problem?
  • What is the CBD?
  • What is the ITTO?
  • What are the advantages and disadvantages of regional-based approaches to address illegal logging and associated trade?
  • What projects have we funded through ITTO?
  • What is forest certification?

INTRODUCTORY FOCUS QUESTIONS AND ANSWERS

What is illegal logging and associated trade?

Illegal logging takes place when timber is harvested, transported, bought or sold in violation of national and/or international laws. It is a pervasive problem in many countries where it is undermining authorities� efforts to manage forests sustainably. Over the last five years it has become an issue at the forefront of international forestry dialogue, and there is a growing international willingness to combat the problem.

It is difficult to find a global definition of illegal logging, because much depends on the specific laws of an individual country. New Zealand accepts that sovereign nations are best placed to confirm the legality of timber operations and timber trade. In cases where forest governance, law enforcement, and SFM are weaker than desired we acknowledge that partnerships involving sharing of information and best practices may be helpful in ensuring legality.

What are some examples of illegal logging and associated trade?

Examples of illegal logging include:

  • logging protected species;
  • duplication of felling licenses;
  • girdling or ring-barking, to kill trees so that they can be �legally� logged;
  • contracting with local entrepreneurs to buy logs from protected areas;
  • logging in protected areas;
  • logging outside concession boundaries;
  • logging in prohibited areas such as steep slopes, riverbanks and water catchments;
  • removing under/oversized trees from public forests;
  • extracting more timber than authorised;
  • reporting high volumes extracted in forest concessions to mask the fact that part of the volume declared is extracted from non-authorised areas outside the concession boundaries;
  • logging without authorisation;
  • obtaining logging concessions through bribes;
  • setting woodlands on fire to convert them to commercial uses;
  • transporting logs without authorisation;
  • transporting illegally harvested timber;
  • smuggling timber;
  • exporting and importing tree species banned under international law, such as CITES;
  • exporting timber in contravention of national bans;
  • declaring lower values and volumes than actually exported;
  • declaring higher purchase prices above the prevailing market prices for inputs such as equipment or services from related companies;
  • manipulating debt cash flows to transfer money to subsidiary or parent companies, for example by inflating debt repayment to avoid taxes on profits;
  • under-grading, under-valuing, under-measuring and misclassification of species exported or for the local market;
  • operating without a processing license;
  • ignoring environmental, social and labour laws and regulation;
  • using illegally obtained wood in industrial processing.

What are the causes of illegal logging and associated trade?

The list below shows the broad range of potential causes of illegal logging and associated trade. The wide range of causes across all parts of society means that finding ways to address this problem is difficult and requires cooperation between countries to find solutions.

Causes of illegal logging

Governance

  • Weak judiciary
  • Lack of consultation/involvement with forestry stakeholders
  • Lack of transparency/accountability
  • Lack of money/funding
  • Unclear allocation of competencies between government departments
  • Lack of recognition of indigenous rights
  • Weak/absent property rights
  • Limited capacity to develop and enforce laws
Legislative and policy
  • Weak penalties
  • Money laundering legislation weak
  • Weak financial/tax laws
  • Conflicting and unclear legislation
  • Transport and trade laws difficult to understand and apply
  • Limited capacity to make efficient and effective laws
  • Inappropriate/discriminatory regulations
  • Absence of national criteria and indicators in forestry
Market
  • Forests not an economically superior land-use
  • Perverse market/non-market subsidies exist
  • Cost of SFM compared to conventional logging high
  • Difficult to change business-as-usual approaches to extracting/trading timber
  • Tension between private and social values
  • Little market for environmental goods or services
  • Lack of producer knowledge about marketing
  • Consumer demand for hardwoods
  • Consumer demand for cheap wood products
  • Lack of consumer knowledge
Capacity and technical ability
  • Inadequate resources
  • Poorly paid forest departments
  • Under funded and resourced customs officials
  • Weak identification of illegal products
  • Remote places that are difficult to monitor
  • Lack of expertise and/or resources in SFM and sustainable livelihoods-focused policy

What are the impacts of illegal logging and associated trade?

Illegal logging affects people�s livelihoods and the welfare of communities, costs governments of producer countries billions of dollars in lost revenue, and causes considerable harm to forests and other ecosystems. Globally, illegal forestry practices are said to result in annual government revenue losses of between US$10 and $15 billion per year. Resources lost through illegal logging are those that could assist in improving SFM, poverty alleviation through better health, education, and housing and environmental programmes.

Another problem is that a significant amount of this illegally cut wood enters the global wood trade, depressing prices of legally harvested wood products and presenting unfair competition to those companies that respect the law. New Zealand�s wood industry operates under the sustainable management principles of the Resource Management Act 1991 and the indigenous forest provisions (Part IIIA) of the Forests Act 1949. It is therefore difficult for the New Zealand wood industry to compete fairly with competitors who can bypass equivalent requirements through illegal logging practices.

Illegal logging fuels an image of forestry as a practice and trade that cares little for social, community, economic and environment issues. Whilst illegal logging continues it is difficult to achieve movement towards global sustainable forestry management practices. On the other hand, well-managed sustainable and legal wood supply represents an environmentally friendly, low energy intensity and sustainably produced resource.

The list below shows examples of the wide range of potential impacts of illegal logging on economies, governance, communities and the environment.

Impacts of illegal logging

Social
  • Weakened indigenous resource management institutions
  • Marginalisation of those without access to resources and little political clout
  • Environmental degradation resulting in inability to use land or sustain livelihoods
  • Social conflict, marginalisation and impoverishment of vulnerable communities that suffer violations
  • Decreased access to forests or land
  • Reduced government expenditure on welfare, community spending and environmental management
Environmental
  • Biodiversity reduced
  • Habitats degraded or lost
  • Alteration of watershed and ecosystem functions
  • Carbon emissions
  • Erosion
  • Ecosystems degraded
  • Marginalisation of wood products
Governance
  • Erosion of the rule of law
  • Weakened general and environmental governance
  • Corruption
  • Conflict
  • Loss of progress towards SFM
Economic
  • Loss of government revenue
  • Loss of company profit
  • Distortions through rent-seeking
  • Competitiveness of industry affected
  • Small companies and individuals may be marginalised
  • Existence of perverse incentives

What is the global scale of illegal logging and associated trade?

Illegal logging is a pervasive global problem. A number of estimates quote figures of illegal logging nearing, equalling or in some cases even exceeding the legal harvest of timber in some countries. Illegal logging is especially prevalent in countries that have limited resources to monitor and control forestry operations.

The global extent of illegal logging is difficult to estimate accurately. A number of reasons contribute to this lack of accuracy, the obvious one being that because the logging is illegal it is not well documented. In many countries where there are large expanses of forest, it is difficult to monitor ongoing activities within those forests due to limited resources available to forest management administrations. This is especially so in developing countries or transition countries. A lack of a common definition of what constitutes illegality also contributes to poor evaluations of the problem.

Evaluations of the extent of the problem tend to focus on illegal logging in terms of discrepancies between the volume of timber that is statistically reported in some producer countries, and on imports by consumer countries. Other evaluations focus on the monetary losses incurred by governments in countries where illegal logging is significant.

Methods of evaluation are also influenced by other factors separate to illegal logging, which lead to imperfect statistical results. For example, in trade statistics generally there are problems with measurements and tariff line definitions.

A study of the global wood trade in 2002 estimated that 8 percent of industrial roundwood (131 million cubic metres), 6 percent of lumber (26 million cubic metres) and 17 percent of plywood (10 million cubic metres) constituted illegal trade (Seneca Creek Associates and Wood Resources International3).

Despite the lack of definitive data on the extent of illegal logging, all studies indicate that illegal logging is a pervasive problem in many countries. Of some concern is the fact that estimates in all studies are likely to understate the magnitude of illegal acts occurring.

What is the difference between sustainable forest management and legal logging?

�Legal� forestry is not the same thing as �sustainable� forestry. Illegal logging relates to the legality of the harvesting, transportation and sale process. Sustainable forest management has been defined in many ways4, but as the name explicitly states it refers to the way in which a forest is managed.

While timber from a sustainably managed forest must, by most definitions of SFM, be legally managed and harvested, it need not follow that legal timber must come exclusively from sustainably managed forests. SFM can, of course, play a role in addressing the problem of illegal logging. Efforts to promote its application and highlight its benefits should be encouraged.

Showing communities in countries where illegal logging is a problem that there are sustainable ways of utilising their forest resources may encourage the enforcement of those laws that are directly aimed at addressing illegal logging. However, illegal logging can also be a major obstacle to advancing SFM. The increased costs associated with SFM incurred through evaluation, management and protection of environmental and social values and adherence to national legislation (including tax payments), may make SFM unprofitable when competing against illegal logging operations.

We must demonstrate the extra rewards gained through SFM to effectively encourage greater uptake of SFM practices. But we must also encourage stringent laws, effective enforcement and proper penalisation of illegal logging so as to effectively punish those that break the law.

What are some ways countries can work together to address the problem of illegally harvested or traded wood products?

There are various ways that countries can work together to help combat illegal logging and associated trade. For example, countries already work:

  • multilaterally (e.g. through the Forest Biological Diversity programme in the Convention on Biological Diversity);
  • regionally or topically (e.g. Asian Forest Law Enforcement and Governance Programme or Montreal Process);
  • bilaterally (e.g. UK�Indonesian Memorandum of Understanding on Illegal Logging);
  • public�private partnerships (e.g. countries working together in collaboration with private organisations (non-governmental organisations (NGOs), industry) such as the Congo Basin Forest Partnership).

Working together may include a range of actions to help support change within and between countries to address illegal logging and might include:

  • developing common policies, laws or regulations, and/or clarifying existing ones;
  • exchanging information;
  • providing expertise and technology to support country efforts in addressing illegal logging issues;
  • sharing models of best practice;
  • supporting public�private partnerships;
  • implementing international commitments agreed in international fora;
  • contributing development aid aimed at creating sustainable livelihoods based around forestry resources;
  •  facilitating implementation of sustainable forestry management practices.

What international initiatives exist to combat illegal logging?

Illegal logging has risen to prominence in international forestry dialogue over the last three years to the point where it is now a major topic in many international discussions. In this section we have provided details of selected efforts that are occurring internationally to combat illegal logging. These efforts, which are divided into individual, bilateral, regional and international initiatives, show the complex array of measures that can be used to combat the problem.

Individual initiatives:

  • Australia�s active contribution in aid towards SFM programmes thorough AusAID, and through funding projects in the ITTO;
  • European Union (EU) instigation of a legality licensing scheme as part of the Forest Law Enforcement and Governance and Trade (FLEGT) process, to ensure only legal timber enters the EU, in conjunction with bilateral or partnership agreements with trading countries;
  • increased global industry activity in developing industry rules for chain of custody and endorsing procurement of certified products. For example, the UK Timber Trade Federation has developed a code of conduct that includes provisions for procurement of legally sourced timber;
  • increasing acceptance of certification schemes allowing consumers and retailers to check the source and suppliers of goods, and provide a means for good forest managers to promote their products;
  • the United States President�s Initiative Against Illegal Logging (PIAIL) assisting developing countries in their efforts to combat illegal logging, including the sale and export of illegally harvested timber, and in fighting corruption in the forest sector.

Bilateral initiatives:

  • increasing bilateral agreements or memoranda of understanding (MoU) that specifically address illegal logging. For example, Indonesia has entered into MoUs with the UK, Japan, Republic of Korea, and China.

Regional initiatives:

  • various Asia-Pacific regional efforts such as the Asia Forest Partnership, Asia Pacific Forest Commission (APFC) and ITTO directly addressing illegal logging;
  • initiation of the Forest Law Enforcement and Governance Process in East-Asia Pacific (FLEG-EAP) to establish a framework through which producer country governments could work together and with governments of consumer countries to tackle illegal activities;
  • development of a further two FLEG processes, the African FLEG and European Union FLEGT. Interest in developing Russian/Northern Asian and Latin American responses is also gathering momentum.

International initiatives:

  • significant NGO action, including innovative partnerships to sustainably manage large tracts of tropical forest;
  • G-8 Summit recognition in 1998 of illegal logging where it was highlighted as a particular issue of importance and included in the G-8 Action Programme on Forests in 2000 and the 2005 Summit;
  • work programmes in illegal logging such as in the Convention on Biological Diversity (CBD), the ITTO, and the United Nations Food and Agricultural Organisation (FAO);
  • multilateral development banks providing funding for forest law governance and enforcement programmes and using lending policies to influence how concessions are managed.

What are some examples of New Zealand�s involvement in addressing illegal logging?

New Zealand is committed towards working at addressing illegal logging and associated trade problems. Whilst no formal policy has been in place preceding this development phase, officials have been working in areas that can influence addressing illegal logging. Some of these action areas are listed below.

Ministerial involvement

At the Seventh Conference of the Parties of the Convention on Biological Diversity (CBD) in 2004 the Government expressed concern about illegal logging. The Minister of Conservation, Hon Chris Carter, also supported CBD recommendations that priority be given in the CBD�s programme of work to the elimination of illegal logging. The Minister raised the issues of illegal logging in his speech to the high level segment and in bilateral talks with Parties to the CBD.

Discussion by officials at international, regional and bilateral levels on illegal logging issues

During 2004 and 2005, MAF has participated in international discussions on the illegal logging and related trade, including: at the Asia Pacific Forestry Commission in April 2004, the fourth and fifth meetings of the United Nations Forum on Forests, and the meetings of the International Tropical Timber Organisation. Discussions at these meetings highlighted both the extent of the problem and a strong level of support among consumer and producer countries on the need to agree on measures to address both illegal timber harvest and the subsequent trade of timber products.

The Johannesburg Plan of Implementation (JPOI) arising from the World Summit on Sustainable Development (WSSD) in 2002 and the Mauritius Implementation Strategy (2005) place a high emphasis on SFM. The JPOI declares that: �SFM of both natural and planted forests and for timber and non-timber products is essential to achieving sustainable development, and is a critical means to eradicate poverty�� It urges �action at all levels to take immediate action on domestic forest law enforcement and illegal international trade in forest products� [and] promote and facilitate the means to achieve sustainable timber harvesting.� New Zealand delegations took a strong and supportive role in the WSSD process. New Zealand chaired the negotiation process for Mauritius and the New Zealand Associate Minister of Foreign Affairs and Trade was a Mauritius Bureau member.

Aid projects in Sustainable Forest Management

NZAID assistance has moved from a plantation forestry focus in the 1980s and early 1990s to a focus on SFM, and in particular ecotourism as a community level enterprise based on forest conservation. Long-term community ecotourism project work in Fiji, Samoa, Tonga, Solomon Islands, Indonesia, Philippines and Laos through the 1990s and to the present has delivered good development outcomes and also several international awards. NZAID is currently developing both its environment, and its growth and livelihoods policies which, among other things, will enable a more strategic focus on SFM.

In the meantime, a new project engagement in PNG aimed at supporting community SFM including sustainable forestry has been funded to begin in the 2005/06 financial year, and a major catchment-focused SFM project is undergoing feasibility assessment in Aceh, Indonesia. A review of the Bukidnon plantation forestry project in the Philippines has also been completed and demonstrated very positive outcomes. This particular project was one of New Zealand�s largest single development assistance project investments.

Whilst these projects aren�t directly focused on addressing illegal logging, they demonstrate that by working with communities to improve livelihoods through the use of forestry resources we are helping to create more opportunities for local communities to sustainably use forest resources, and play a more significant role in protecting and managing forests. Greater community involvement and/or ownership may help address causes of illegal logging identified earlier.

Implementation of a New Zealand Interim Timber Procurement Policy

In June 2003 the New Zealand Government approved an interim timber procurement policy to encourage Government use of sustainably produced and, where available, certified timber. The interim policy directs government agencies to take all reasonable steps to ensure that timber and timber products procured, including tropical timber and timber products, are from legally logged and sustainably managed sources. The policy is currently (January 2006) being reported back to Ministers.

Advancement of SFM goals internationally, for example, through the Montreal Process

New Zealand is a founding member of the Montreal Process � a Working Group on Internationally agreed Criteria and Indicators for the Sustainable Management of Forests (MPCI). It provides a set of practical tools for countries to implement SFM. The MPCI is geographically the largest of nine other regional and international criteria and indicator processes that span the world�s forests.

There are 12 members in MPCI drawn from both hemispheres, and comprising developed and developing countries. Together they account for 90 percent of the temperate and boreal forests of the world. The MPCI includes criteria to provide a legal, institutional and economic framework for forest conservation and sustainable management, within which specific indicators are included. These indicators directly relate to the proposed goals and intervention needed to help address illegal logging within countries as outlined in Table 4.1.

Industry

The New Zealand forestry industry is making some valuable contributions at addressing illegal logging and raising awareness of the problem domestically.

The Imported Tropical Timber Group (ITTG): The ITTG comprises members from New Zealand timber importers and retailers and from environmental NGOs, including Greenpeace International. MAF has observer status. The ITTG aims to ensure that members import timber in accordance with a charter of understanding including a requirement that members actively seek to import timber from sustainable sources. Not all New Zealand timber importers belong to ITTG.

The ITTG has sought to ensure that the import standards it sets keep pace with international developments in certification and as far as possible seek timber sources that give assurances on sustainability. It has been instrumental in promoting certified timber, under the ITTG Charter of Understanding, and through its membership of timber importers, marketers, retailers and environmental NGOs.

Recently, a high profile court case involving the expulsion of a timber importing company from the ITTG-affiliated New Zealand Timber Importers Association (NZTIA) received national media attention and highlighted the commitment by many in the industry towards tackling illegal logging.

The New Zealand Forest Industries Council: In 2005 the New Zealand Forest Industries Council5 issued a joint statement with the Malaysian Timber Council condemning illegal logging. Both parties committed themselves to work to find solutions to help those countries affected to overcome the problem. The industries also agreed to continue to support the development of voluntary and credible forest certification systems which can address the problems associated with illegal logging.

New Zealand Forestry Codes of Conduct: The New Zealand forestry sector has negotiated a number of national initiatives with environmental groups that focus on forestry environmental issues, which help to ensure that production forestry is sustainable. These include the New Zealand Forest Accord 1991 and Principles for Commercial Plantation Forest Management 1995. The forest industry also promotes SFM in planted forests through innovations like the New Zealand Forest Code of Practice 1993. Other industry initiatives include adoption of certification systems, for example under the Forest Stewardship Council (FSC) process.

Non-governmental organisations

The Government supports the work of the many NGOs that are playing a key part in combating illegal logging. This ranges from NGOs working with industry to find solutions to address trade in illegal wood products, to NGO support of community-based forestry activities in developing countries.

Greenpeace New Zealand: Greenpeace New Zealand has a specific �forests campaign� that features illegal logging issues. This campaign includes working with timber buyers to transform procurement toward legal and responsible management wood product sources, and also documenting illegal activities and providing that information to buyers and the public. Greenpeace New Zealand also aims to support landowners in carrying out forest use options other than illegal and destructive logging.

INTERNATIONAL FOCUS QUESTIONS AND ANSWERS

What are some ways countries can work together to identify legally harvested or traded wood products?

Cooperation to ensure that we have international, regional and bilateral trade systems through which we can identify wood products that have been illegally harvested, processed or traded is important. There are many ways that countries can work together to identify legally obtained or traded wood products. These might include:

  • arrangements between countries that identify and recognise the laws of each country relevant to legal harvesting and trade, and which provide assurances that any harvesting and subsequent trade in wood products is legal;
  • agreed independent monitoring of harvesting, processing and/or trade;
  • cooperation between customs and/or biosecurity officials in each country to exchange information, enforce trading laws and assist in training;
  • development of tracking systems;
  • development of legality standards;
  • introduction of timber licensing schemes between countries;
  • support for private initiatives that identify legal products, such as forest certification.

Work towards progressing many of these practices has already started, most notably through bilateral arrangements between countries, but also in regional processes such as FLEG and the Asian Forest Partnership.

What about a multilateral agreement on illegal logging?

This option is very ambitious. It would require many countries to come together and agree on ways to address the problem of trade in illegally harvested wood products. Whilst not impossible, it would be very difficult to gain consensus towards a binding multilateral agreement. Such an agreement might gain some support if it only focused on the legality requirement. This would mean that some form of common certification of legality of harvesting would most likely be required and that a documented chain of custody would also be needed in any sale and purchase of specified wood products.

Examples of requirements of most multilateral agreements include a set of guiding principles and/or objectives, work programmes, funding mechanisms for implementation, technology transfer provisions and, in the case of an agreement involving illegal trade, some mechanism for trade controls of illegal goods.

Advantages of multilateral agreements may include:

  • universally accepted certification systems;
  • high-level policy guidance;
  • access to multilateral environmental funds (e.g. Global Environmental Fund);
  • tying together of national, bilateral and regional efforts;
  • ensuring consistency, best use of resources, avoiding duplication of efforts;
  • trade controls consistent with international obligations.

Disadvantages of multilateral agreements may include:

  • slow negotiations and extreme difficulty in getting any final multilateral agreement;
  • lack of �bottom up� practical initiatives;
  • inability for countries to resource their obligations, including effective participation in a new agreement;
  • difficulty in achieving consensus for action.

Countries are currently focusing on regional and bilateral initiatives whilst also improving what they can do domestically to address illegal logging and associated trade.

Why do we want greater streamlining of processes, aren�t more better?

Many countries, including developed countries, are struggling to resource their international, regional and bilateral commitments. Such commitments can be costly to service, not only from a monetary perspective but also because of the time and resources needed to effectively ensure that commitments can be implemented and met.

Having more international and regional processes that are committed to trying to resolve a problem may not create a better result in addressing it. Instead, duplication may mean that time and resources are not utilised efficiently and draw attention away from focusing on practical and do-able outcomes that can make a real difference in addressing the causes of illegal logging and related trade. This may mean that the problem is not addressed adequately or as fast as it could be.

Harmonisation between processes is important. This means that decisions made in some fora do not contradict other processes or international obligations. We want to emphasise the need for do-able and consistent strategies across international, regional and bilateral fora, which ensure effective participation from all countries that are interested in addressing illegal logging.

REGIONAL FOCUS QUESTIONS AND ANSWERS

How can we work to achieve greater sharing of information in the region?

One option we are looking to implement is a website for the Pacific region on illegal logging that would provide an information sharing-house to share knowledge, models of best practice, concerns and linkages. The Pacific region, including the Pacific island countries, New Zealand and Australia, is presently under-represented in regional fora.

As illegal logging also affects the Pacific region we feel it is important to ensure that problems with illegal logging and trade that are relevant to our region are also considered in regional processes. Establishing a focal point in Pacific island countries and increasing dialogue on illegal logging and trade issues will be important in achieving this.

To do this we are looking at low cost and resource intensive ways for the Pacific region to cooperate on addressing illegal logging. This means using already established fora for discussion and a central information sharing site, such as the website to exchange views and discuss potential action areas.

What is FLEG?

FLEG is an acronym for Forest Law Enforcement and Governance. In 2001, many countries met to take part in a FLEG East Asia and Pacific (FLEG-EAP) Ministerial Conference. The result of that conference was the Bali Agreement which committed:

�participating countries to, inter alia, intensify national efforts and strengthen bilateral, regional and multilateral collaboration to address violations of forest law and forest crime, and create a regional task force on forest law enforcement and governance to advance the Declaration�s objectives.

At the subsequent FLEG-EAP Task Force and Advisory Group meeting in 2003, participants � who represented a broad range of governments, including New Zealand, NGOs and private sector organisations � cooperated to produce action plans for initial actions in four key areas to be undertaken to curb illegal logging.

The success of this process in initiating discussion and in achieving an agenda for action has resulted in development amongst African states of an African FLEG initiative and a European Union FLEGT in 2003. In 2005 progress towards a Europe and North Asia FLEG leading up to a Ministerial Conference in December was made and a number of preparatory conferences undertaken in 2005. A Ministerial East Asian-Pacific FLEG is also planned for 2006.

BILATERAL FOCUS QUESTIONS AND ANSWERS

What projects have we funded through ITTO?

New Zealand has co-funded a project through the ITTO that aims to increase transparency in the tropical wood products market in China through an assessment of trade flows and distribution channels. The assessment will include a detailed record of product trade flows by volume, value and country of origin, and other relevant characteristics including species.

Due to increasing concern with the sustainability and legality of tropical forest products, the study will identify supply and demand trends in legal and sustainable products, including certified wood.

Policy work has also been funded, with New Zealand contributing to an audit of existing tracking systems in tropical forests industries. We see this as a critical tool to assist producer countries monitor progress towards and facilitate SFM. It also helps to address robust tracking systems to contribute to better knowledge about trade in illegal wood products and enhanced ability to enforce rules.

What types of bilateral arrangements exist to help combat illegal logging and associated trade?

Bilateral arrangements involve commitments made between two countries. Bilateral arrangements have a distinct advantage in that they are relatively easy to achieve compared to regional or multilateral arrangements, which involve more countries.

Indonesia�UK Memorandum of Understanding on Illegal Logging

An example of a bilateral arrangement to address illegal logging is the Indonesia�UK Memorandum of Understanding on Illegal Logging. This commits both countries to work together to reduce, and eventually eliminate, illegal logging and the international trade in illegally logged timber and wood products by the development and implementation of the necessary regulatory and policy reforms.

Currently both countries are working together to develop a legality standard. The aim is to establish key principles of forest production which would allow for the selection of a sub-set of relevant laws, and develop criteria, indicators and guidance to allow for effective field audits.

Seven key areas of law have been identified:

  • land tenure and use rights;
  • environmental and social impact;
  • community relations and workers� rights;
  • timber harvesting laws and regulations;
  • forest taxes;
  • log identification, transfer and delivery;
  • timber processing, sales and shipping.

This work has had some success already with in-depth field testing of a draft legality standard resulting in it being fully adopted by the company involved in the pilot project, and the Government of Indonesia committing itself to testing the system with 20 more companies in 2006.

FLEGT Voluntary Partnership Agreements

The European FLEGT process involves the development of voluntary partnership agreements with timber-producing countries. These agreements between the EU and producer countries will bring together development assistance, governance reform support and measures to combat the trade in illegal timber. They will also be supported by public procurement policies, private sector initiatives and financing reform. Current discussions are under way with Cameroon, Republic of Congo, Gabon, Ghana, Indonesia and Malaysia.

The formal process of negotiating partnership agreements is currently proceeding through the EU legislative process, an Ad Hoc Group of Commission and member states, informal consultations with key countries and the provision of development assistance. This will result in a timber import licensing scheme and a mandate for formal negotiation of partnership agreements on which the scheme will be based.

In addition to discussions, substantial technical assistance funds have been made available to Indonesia (�15 million), Vietnam and Central Africa; pilot projects are under way on forest governance themes (�16 million); and there has been investment in regional FLEG processes (�3 million).

What can we do within future free trade agreement negotiations to address concerns about illegal logging and associated trade?

Cabinet has mandated that New Zealand negotiators seek to integrate trade and environment in free trade agreements. This acknowledges the linkage between trade and environment, and the importance of addressing environmental issues between the parties concerned.

The New Zealand approach to the integration of trade and environment is based on three elements: cooperation, consultation and some core trade and environment principles (such as ensuring that parties meet their own domestic standards and do not use environmental standards as a trade barrier). There are environmental arrangements in both the New Zealand�Thailand Closer Economic Partnership Agreement and the recently concluded Trans Pacific Strategic Economic Partnership Agreement (between New Zealand, Brunei, Chile and Singapore).

New Zealand will be seeking a similar arrangement in its negotiations with China. If it is achieved, such an arrangement would offer the opportunity for New Zealand to raise issues of illegal logging with China and work towards a bilateral solution.

NEW ZEALAND FOCUS QUESTIONS AND ANSWERS

Can New Zealand really make a difference?

New Zealand is an active and respected participant in international forestry fora. We are represented in various forestry fora such as the Food and Agriculture Organisation (FAO); including its regional body, the Asia Pacific Forestry Commission; the United Nations Forum on Forests (UNFF); International Tropical Timber Organisation (ITTO); Forest Law Enforcement and Governance East Asia Process (FLEG-EAP); and the Montreal Process for Criteria and Indicators for Sustainable Forest Management.

New Zealand also actively participates in the Convention on Biological Diversity (CBD), which has a strong forestry element in its work programme. New Zealand, like other countries, can advocate for work programmes or international focus on specific issues at these fora.

Combating illegal logging requires producers and consumer countries to work together to find solutions.

International and regional sustainable forestry fora provide a good opportunity to do this. New Zealand can share experiences and learn from others when searching for solutions to address the causes of illegal logging. New Zealand can also contribute its knowledge in SFM to counterparts in countries that lack the same access to resources and management capacity.

Lastly, consumers of wood products can make a difference by ensuring that the wood products that they buy are legally harvested, traded and sustainably produced. Consumers can do this by asking retailers for greater information on the products that they are buying and for assurances of legality.

What is the New Zealand Government Timber Procurement Policy?

New Zealand currently has a government timber procurement policy, approved by Cabinet in June 2003, which aims to encourage government use of sustainably produced and, where available, certified timber. The policy directs government agencies to take all reasonable steps to ensure that timber products procured are from legally logged and sustainably managed sources. A review of the timber procurement policy has recently been completed, and Cabinet is expected to consider the outcomes of the review in early 2006.

For more information please see www.maf.govt.nz/forestry/publications/timber-procurement-policy

CONSUMER FOCUS QUESTIONS AND ANSWERS

Does illegal logging and associated trade occur in New Zealand?

Within New Zealand there have been relatively minor instances of illegal logging. Most known cases have been successfully prosecuted.

Forestry operations in New Zealand must comply with strict controls under New Zealand legislation such as the Resource Management Act 1991 and, in the case of indigenous timber, Part IIIA of the Forests Act 1949. In addition to these strict controls, some forestry and wood products operators have also chosen to join third party certification schemes and/or gain relevant ISO environmental accreditation.

Under the Forests Act 1949, indigenous forests on privately owned property may be harvested in accordance with a Sustainable Forest Management Plan or Permit issued to the owner through MAF�s Indigenous Forestry Unit (IFU). Such plans or permits require property owners to manage the forest in a sustainable way which ��maintains the ability of the forest to provide a full range of products and amenities in perpetuity while retaining the forest�s natural values�. Sustainable plans and permits regulate the amount of timber which may be harvested and set conditions on the manner in which harvesting may proceed, the replanting where required of indigenous seedlings and the protection of the forest, soils and water. Under the Forests Act all sawmills used for milling native timber must also be registered with the IFU.

A recent case of illegal logging resulted in a fine of $56,000 � the highest penalty ever handed down in New Zealand for such forestry offences. This conviction of over-logging indigenous rimu sent a clear message that the consequences are severe for those breaking the rules around the harvest of native forests.

What can consumers do to help combat illegal logging and associated trade?

New Zealand timber is harvested and processed according to well-enforced environmental laws. Therefore, New Zealand consumers can generally assume that the timber they buy is legal and sustainable if it is produced in New Zealand, it carries an ecolabel or it is certified by a third party certification scheme, such as the Forest Stewardship Council.

Consumers can seek out these products or ask when they are buying imported wood products what assurances the seller can give that the particular wood product has been harvested, processed and traded legally.

Consumers have the most powerful and important role in addressing illegal logging and related trade. Illegal practices will not be able to be sustained without willing buyers to purchase illegally harvested, processed or traded wood products. We must all play a part in choosing to buy only wood products that we believe come from legal sources.

3Ibid.

4The International Tropical Timber Organisation (ITTO) definition of SFM is that �Sustainable forestry is a process of managing forests to achieve production of a continuous flow of desired forest products and services without undue reduction of [the forest�s] inherent values and future productivity and without undue undesirable effects on the physical and social environment."

5The New Zealand Forest Industries Council (FIC) was disbanded in mid-2005 and was superseded by the Wood Council of New Zealand (Woodco), which was established in late 2005. It is anticipated that Woodco will formally adopt the policies and positions of FIC.

Contact for Enquiries

Senior Policy Analyst
International Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND

Phone: +64 4 894 0650
Fax: +64 4 894 0742

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