Intense negotiations are ongoing as the draft EU law on \"deforestation-free\" and \"forest degradation-free\" products, published by the European Commission (EC) on 17th November last year, navigates the various stages of the EU law-making process.<\/p>\n
The draft law is planned to replace the EU Timber Regulation (EUTR) while at the same time extending regulations to a range of \u201cforest risk\u201d agricultural commodities, including beef, cocoa, coffee, palm oil and soy together with derived products.<\/p>\n
To become law the final text must be adopted jointly by the European Parliament and the European Council of Ministers. At this stage, drawing on views expressed by Agriculture Ministers of Member States at their Council meeting on 21 February there seems to be broad endorsement across all EU member states of the law's objectives and agreement that due diligence by producers and importers placing regulated products on the EU market should be the basis of the regulation.<\/p>\n
On the other hand, there is a variation in views across Member States on the details of the regulation, particularly the definitions of \"deforestation\" and \"forest degradation\" and the controversial proposal that the law should ban commodities derived from land that is legally deforested (i.e., as part of a nationally approved land use plan) as well as illegally deforested.<\/p>\n
There is also widespread concern across Member States over the complexity of enforcement, the costs and potential discriminatory consequences for smallholders and SMEs and the impact on consumer food prices and global competitiveness of European producers in the global forest products and agricultural commodities trade. The Agriculture Council meeting indicated that there is a way to go before Member States reach consensus on this legislation with some calling for more product specific impact assessments to extend the assessment already undertaken by the EC.<\/p>\n
This process may take some time, despite the clear stated priority attached to passage of the law by the current French Presidency of the EU Council, which runs for the first six months of this year.<\/p>\n
France has expressed ambitions to adopt conclusions in March while the European Parliament plans to adopt its position before July. Time is of the essence for France's Council presidency as it could be severely curtailed by April\u2019s election when President Macron is expected to seek re-election.<\/p>\n
Further insights into the extent of EU-wide consensus on the deforestation regulation will come when EU EnvironmentMinisters discuss the proposal at their next Council meeting on 17 March.<\/p>\n
But as things stand, the original timetable set out by France seems optimistic. The actual timing may well hinge on the priority attached to the legislation by the countries holding the subsequent six-month rotating presidencies, the Czech Republic followed by Sweden<\/p>\n
Major implications for FLEGT VPAs<\/strong><\/p>\n The implications of any potential delay in the EU reaching some form of consensus on the new law, irrespective of whether the EU eventually decides to adopt something similar to the existing text, or to reject it altogether, are significant for those tropical countries that are signatories to existing FLEGT VPAs. There is now considerable uncertainty over the future policy direction in the EU raising concerns about a hiatus in implementation of existing agreements.<\/p>\n The uncertainty is particularly problematic for Indonesia, the only country to have achieved FLEGT licensing, and which is looking to the EU to fulfil its obligations under Article 13 of the VPA. This requires that the EU \"shall promote a favourable position\" in the EU market for licensed timber, including through \"public and private procurement policies that recognise a supply of and ensure a market for legally harvested timber products; and a more favourable perception of FLEGT-licensed products on the Union market\".<\/p>\n If the draft deforestation legislation is passed into law in its current form, the scope for the EU to promote \"a favourable position\" for FLEGT licensed timber in the EU market would be constrained.<\/p>\n While the regulatory proposal includes a provision declaring wood covered by a FLEGT license to have fulfilled the legality requirement there is no provision for FLEGT licenses to meet the \"deforestation-free\" or \"degradation-free\" requirement.<\/p>\n This creates a situation whereby EU operators could reject FLEGT-licensed timber on grounds that, while it is entirely legal, it does not fulfil the EU\u2019s definitions of \"deforestation-free\" or \"degradation-free timber\". Any suggestion that FLEGT licensed timber may not meet these definitions would contradict the EU\u2019s obligation to promote \u201ca more favourable perception of FLEGTlicensed products on the Union market\u201d.<\/p>\n The draft legislation provides one potential route out of this dilemma, through the proposed country benchmarking. The draft legislation enables the European Commission to assess the risk of commodity-driven deforestation and forest degradation by country and to categorise each country (or sub-national region) as \"low\", \"standard\" and \"high risk\".<\/p>\n Operators would be permitted to implement \"simplified due diligence\" procedures excluding the requirement for risk assessment and mitigation for all commodities from countries assessed to be \"low risk\".<\/p>\n The far-reaching forest reform process undertaken as part of the VPA should better position Indonesia to achieve a \"low-risk\" status. However, according to the current draft regulation, achieving such a status would require that Indonesia demonstrates that no forest-risk commodities with potential to enter EU supply chains derive from any forest land cleared after 31 December 2020, irrespective of whether the clearance is legal or illegal.<\/p>\n All timber products would also be required to meet a definition of \"degradation-free\" which is regarded, even by some governments of EU member states, to be highly problematic and likely to conflict with national forest policies.<\/p>\n While the EU and Indonesia may yet negotiate a way around the looming roadblock for FLEGT licensed timber created by the new regulation it is hard to escape the conclusion that this ratcheting up of requirements only five years after FLEGT licensing became operational is not what Indonesia signed up for through the VPA, nor is it likely to be viewed in Indonesia as an adequate return in terms of a favourable position in the EU market after a decade of forest reform.<\/p>\n The on-going negotiations around the new deforestation regulation in the EU have implications for the recent rebranding campaign for the SVLK standard, which forms the basis for the FLEGT licensing system, as a sustainable forestry standard.<\/p>\n The campaign developed by the Indonesian Ministry of Environment and Forestry (MoEF) through a multistakeholder process supported by the UK government has the expressed aim to ensure that SVLK certification meets the sustainability requirements of even the world\u2019s most environmentally sensitive markets.<\/p>\n The SVLK rebranding is explicitly designed to address increasing demand for sustainably produced timber products and deforestation-free supply chains. It also addresses the reluctance among the timber trade to promote the concept of \u201clegal timber\u201d, which is now considered a basic requirement in regulated consumer markets and not an add-on that should be specifically promoted or highlighted.<\/p>\n Besides sustainability aspects, the Indonesian promotion campaign intends to highlight the strengths of Indonesian timber products identified through stakeholder consultations in Indonesia and other research and surveys, including trade surveys by the FLEGT Independent Market Monitor.<\/p>\n To ensure that the market benefits of Indonesia's delivery of FLEGT licensing after a decade of forest reform are not lost during this period of uncertainty, there is a clear need now for dialogue between Indonesia and the EU to resolve potential differences of interpretation in relation to definitions of deforestation, forest degradation and sustainability.<\/p>","protected":false},"excerpt":{"rendered":" Intense negotiations are ongoing as the draft EU law on “deforestation-free” and “forest degradation-free” products, published by the European Commission (EC) on 17th November last year, navigates the various stages of the EU law-making process. The draft law is planned … Continue reading