FLEGT is big, says Director General for the Environment

In this exclusive interview with the ETTF, European Commission Director General for the Environment Daniel Calleja Crespo describes the first year of FLEGT licensing by Indonesia as a great start. Now, he says, it’s the responsibility of all stakeholders to capitalise on the opportunities presented by this unique timber legality initiative and to take the wider EU FLEGT Action Plan forward.

by Multistakeholder Forestry Programme Indonesia, MFP3

ETTF: Do you regard the first year of FLEGT licensing by Indonesia as a success?

Daniel Calleja Crespo: The start of FLEGT licensing by Indonesia has been a significant milestone for both Indonesia-EU timber trade and the EU FLEGT Action Plan. It’s shown that it’s possible to develop systems to bring complex supply chains  under effective control and verify legality of timber products. In doing so it’s reinvigorated support for the implementation of the FLEGT Action Plan as a whole, including from the EU timber trade.

The progress achieved by Indonesia in policy reform and engagement in the FLEGT progress is certainly remarkable. While it still faces significant challenges in terms of protecting its forests, the forestry sector is now largely under control and illegal  logging is not the same challenge it was. Over 23m hectares of forests, including 13m hectares of natural forests, are now SVLK-certified, as well as 3,498 forest-based enterprises, and almost 36,000 FLEGT licences have been issued for exports to the EU worth €1.1bn, accounting for around 25% of EU tropical timber imports. This is big.

So one year later, we’re pleased that overall the implementation of this novel scheme has been relatively smooth. Thanks to thorough preparation, both EU and Indonesian private sectors have adapted to the new requirements and there’s very good cooperation between EU and Indonesian authorities on implementation and achieving the wider objectives of the VPA in forest governance. Challenges remain, but these are teething problems that don’t detract from FLEGT licensing’s added value.

ETTF: What have been the key impacts for the EU timber of FLEGT licensing?

DCC: It’s too early to come to conclusions on market impacts, but there’s no doubt that there’s increased confidence in Indonesian timber legality in international markets. Indonesia worked hard on this and began seeing the benefits even before the official start of licensing. However when it did start, with the additional controls in place in the EU to bar unlicensed Indonesian timber from the market, it gained visibility and credibility vis-à-vis EU importers and customers. The EU private sector has also welcomed FLEGT-licensed timber as a means of simplifying EU Timber Regulation (EUTR) compliance. Feedback from a recent ITTO survey showed over 73% of EU respondents would favour FLEGT–licensed timber over non-licensed. This is  remarkable considering that FLEGT is new to the market and that there’s still room for improvement as other market players gain understanding of and confidence in SVLK and FLEGT licences from Indonesia.

ETTF: Some in the EU trade feel there’s still lack awareness of FLEGT licensing further down the supply chain and among consumers. So is more communication needed?

DCC: I’d agree that knowledge about FLEGT among the public remains limited and that we need all players to step up communication efforts about what is really behind a FLEGT licence. The EU and Indonesian private sector in particular needs to play a more proactive role in telling the FLEGT story. The Commission and EU Member States have invested significant resources in communicating the FLEGT Action Plan and in progress made in individual countries, including Indonesia. However, while supporting others’ efforts, we don’t have the timber industry’s direct connections with business and customers, or with civil society organisations, with their campaigning capacity.

ETTF: There’s particular concern in the EU and Indonesian trades that the wider impacts of a FLEGT VPA beyond legality assurance aren’t sufficiently known. Do these especially need highlighting?

DCC: Yes. For too long, communication around FLEGT licensing has been framed around how it facilitates trade through  compliance with legality requirements, such as the EUTR. But FLEGT VPAs have also been instrumental in supporting  establishment of far-reaching national processes leading to major policy reforms, participatory decision-making, better law  enforcement, increased transparency and access to information. This contributes not just to better forest protection, but also protection of the rights of individuals, local communities and indigenous peoples.

ETTF: Some in Indonesia also feel the EU could 'promote' FLEGT licensed goods in the marketplace. How would you address that?

DCC: As I said, FLEGT-licensed timber has special recognition under the EU’s legal framework, making it attractive for the private sector. FLEGT licences are automatically deemed compliant with EUTR requirements and are recognised as proof of legality under all EU Member States timber procurement policies. This means their use is promoted by our legal framework.

Also the voluntary green public procurement criteria developed by the EC explicitly recognise timber legality as a core criterion and a FLEGT licence as a means of proof. Some expect now that FLEGT licences would also be recognised as means to demonstrate sustainability. But there is not yet an agreed set of sustainability criteria for timber at EU level and Member States currently apply their own. There are potential arguments to support recognition of FLEGT licences in terms of sustainability, but to obtain this each partner [supplier] country must demonstrate how their national systems match the objective and criteria of  sustainability established by various EU Member States.

At the same time, the Indonesian government and timber industry cannot disregard the need to market and promote FLEGT licensing themselves, or the industry rely solely on it for future growth. Quality, prices, delivery time and ability to attract foreign investment or meet other market requirements remain essential for the success of the Indonesian forestry sector.

ETTF: How important has Indonesia's successful start of FLEGT licensing been in aiding other FLEGT VPA countries through the process?

DCC: Indonesia is pioneering the first FLEGT licensing scheme and generating global interest for it. Fellow VPA partner countries, as well as Indonesian neighbours and competitors, are looking to learn from their experience and to follow in their footsteps. Other major markets, for instance China, have also expressed interest in exploring the role FLEGT licences from Indonesia can play in their systems to ensure and demonstrate supply chain legality. Both the EU and Indonesia have been documenting lessons learned and we are actively promoting their exchange among VPA partner countries.

ETTF: Should the priority now be on supporting existing FLEGT VPA supplier countries towards FLEGT licensing, or getting more countries to become signatories?

DCC: We may need to do both, but in a smart manner. Current VPA implementing and negotiating countries already account, remarkably, for over 80% of EU tropical imports. On one hand, it’s clear we need to ensure that those agreements already concluded achieve their intended results in terms of forest governance and progress towards FLEGT licensing. Where this isn’t happening, we need to understand why and agree with partner countries the best options to move forward together. On the other hand, the EU has initiated VPA negotiations with several countries which are important for forest resources or timber trade. Here there is merit in concluding negotiations, given shared commitment on both sides to make progress. However, given limited EC resources, we need to consider investment in those countries where VPA negotiations are not advancing, so it can be re-directed to where it’s needed most.

ETTF: Some in the EU favour refocusing support towards their biggest suppliers among FLEGT VPA countries. What’s your response to that?

DCC: I agree with investing resources where they deliver higher return. But I’d question whether this should only be measured in terms of timber trade with the EU. FLEGT VPAs are as much about improving forest governance and law enforcement in countries where, while current trade levels with the EU may be limited, often forest cover is significant and the forestry sector plays a central role in sustainable development.

ETTF: How important has been the continued support of the EU trade for the FLEGT VPA initiative?

DCC: You don’t sustain a policy initiative such as FLEGT for such a long time without the support of all stakeholders, including the EU trade. There’s also a sense now that, after some years of fatigue, the start of FLEGT licensing and availability of licensed timber has reignited the interest and support of the private sector. We hope this renewed interest will also translate in to more systematic efforts to inform markets across the EU about FLEGT.

ETTF: How do you now see the FLEGT VPA initiative and FLEGT licensing developing?

DCC: Following an evaluation, all EU institutions and Member States have confirmed support for FLEGT. In the future, we want to see more countries being able to start FLEGT licensing, but also VPA processes serving as a basis for a continuous striving towards sustainable forest management. In parallel, there’s a lot of discussion in the EU about how to better tackle drivers of deforestation that lie outside the forest sector, particularly agricultural expansion.

ETTF: How important is winning acceptance of FLEGT licensing as contributory evidence of legality outside the EU.

DCC: This is a major priority for the EU FLEGT Action Plan. The more markets that recognise the efforts made by our partner countries, the more difficult it will be for others to place illegal timber in less scrupulous markets and the greater the pay-off for producer countries. For instance, joint activities with China on this continue, including with a view to exploring means to recognise FLEGT licences under their future [legality] measure. We have also raised the matter with international partners such  as Japan, which have recently adopted new timber legality measures.

 

Read the entire ETTF newsletter here.