The EU FLEGT The EU FLEGT initiativeinitiative

Berlin11 June 2013

DG EnvironmentEuropean Commission

BackgroundBackground

Concerns about EU serving as a market for illegally harvested timber, including “conflict timber”

2001 Forest Law Enforcement and Governance (FLEG)

2003 EU adopted FLEGT Action Plan (+T for Trade)

2005 FLEGT Regulation 2010 EU Timber Regulation

FLEGTFLEGT ActionAction PlanPlan

Legality as a foundation for sustainability Main elements

Development cooperation Public procurement policies Private sector actions FLEGT Voluntary Partnership Agreements

(VPAs) Additional legislative options

1. FLEGT1. FLEGT VPAsVPAs

Legally binding bilateral agreements on trade in forest products

Participatory negotiation process Based on partner economies laws Independent system audit function Controls at EU Customs Need time for negotiation and then

implementation

FLEGT licenses (not yet)System developmentFormal negotiations

Entering negotiationsPreparation, in-country consensus

buildingIntroduction to VPAs

Congo C.A.R..

Malaysia

Indonesia

Cameroon

Ghana

Liberia

FLEGT VPA partners Jan 2013

Gabon D.R.C.

Viet Nam

Guyana

Honduras

Laos

OtherOther DialoguesDialogues

EU-Russia FLEGC EU-China FLEG BCM + informal contacts the US; Australia;

Japan

2. EU Timber 2. EU Timber RegulationRegulation

Bilateral VPAs good, but demands for overarching legislation to prevent the EU serving as a market for illegally harvested timber

2008 US Lacey Act amended to prohibit the sale of illegally harvested timber

EU legislative proposal put forward in 2008 Amended proposal adopted as Regulation (EU)

995/2010, entered into force on 2nd December 2010 applicable since 3 March 2013

Legal FrameworkLegal Framework

OBLIGATIONSOBLIGATIONS

Operators shall exercise due diligence when placing timber or timber products on the market. To that end, they shall use a framework of procedures and measures, hereinafter referred to as a ‘due diligence system’, as set out in Article 6 of the EUTR

Due diligence

The placing on the market of illegally harvested timber or timber products derived from such timber shall be prohibited

Traders shall be able to identify from who they bought the timber products and where applicable to who they have supplied the timber products

Prohibition

Traceability

WHO IS LIABLE?WHO IS LIABLE?

“Operators” = any natural or legal person who places timber or timber products on the EU market. Liable for:Exercising of due diligenceProhibition

“Traders” = any natural or legal person who trades on the internal market timber or timber products already placed on the market. Liable for the “traceability”

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Illegally harvested

Harvested in contravention of the applicable legislation in the country of harvest

Applicable legislation in the country of harvest

- Legal rights to harvest

- Taxes and fees linked to harvesting

- Compliance with timber harvesting laws, including directly related environmental and forest legislation

- Respect for third parties tenure/use rights

- Trade and customs laws in so far as the forest sector in concerned

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placinginformation

risk evaluation

risk mitigation

Key components of a DDS

1) Access to information: species, origin, quantities, traders and compliance with legal requirements of harvest country

2) Risk assessment: certification; prevalence of illegal harvesting; sanctions; complex supply chains, etc.

3) Risk mitigation: Ex: additional information or documentation; certification, etc.

Negligible risk - where following full risk assessment no cause for concern can be discerned

• Products covered by FLEGT or CITES licenses are considered to have been legally harvested for the purposed of the EU Timber Regulation

• This means by importing FLEGT or CITES licensed timber, due diligence is exercised.

Monitoring organisations (MO)

Legally established within the EU and recognised by Legally established within the EU and recognised by the Commission/the EFTA Surveillance Authoritythe Commission/the EFTA Surveillance Authority

Maintain and evaluate a due diligence system and Maintain and evaluate a due diligence system and grant operators the right to use itgrant operators the right to use it

Ensure that operators correctly apply the due Ensure that operators correctly apply the due diligence systemdiligence system

Will be subject to checks by competent authoritiesWill be subject to checks by competent authorities

MO assist operators and MO assist operators and is an option is an option for operatorsfor operators

Commission in a process of recognising first Commission in a process of recognising first successful applicantssuccessful applicants

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PRODUCT SCOPE

Listed in Annex using EU Customs Listed in Annex using EU Customs codescodes

Covers a wide range of timber productsCovers a wide range of timber products

Does not cover: Does not cover: – Waste and recycled productsWaste and recycled products– Packaging material to support or carry Packaging material to support or carry

another productanother product– Certain bamboo and rattan productsCertain bamboo and rattan products– Other products not listed in Annex (toys; Other products not listed in Annex (toys;

musical instruments)musical instruments)

May be amended to include other May be amended to include other products (Chapter 49)products (Chapter 49)

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EUTR Enforcement: the EU Member States

Competent authorities (CA) = national government Competent authorities (CA) = national government bodies responsible for the application and bodies responsible for the application and enforcementenforcement: : Check operators; Check MOs; Reports, etc.Check operators; Check MOs; Reports, etc.

A list of EU MS` CA can be found here:A list of EU MS` CA can be found here:http://ec.europa.eu/environment/forests/timber_regulation.htm

Penalties: effective, proportionate and dissuasive Penalties: effective, proportionate and dissuasive penaltiespenalties

Commission monitors uniform implementation: regular Commission monitors uniform implementation: regular meetings with CA meetings with CA

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Role of 3rd party verified schemes (certification)?

Recognition of the voluntary certification in the Recognition of the voluntary certification in the Preamble - Preamble - Recital (19)

Role in the risk assessment - Role in the risk assessment - Art. 6 (b) ““[...] Risk assessment procedures shall take into account [...] relevant risk assessment criteria[...] Risk assessment procedures shall take into account [...] relevant risk assessment criteria

including: Assurance of compliance with applicable legislation, which may include certification or including: Assurance of compliance with applicable legislation, which may include certification or

third-party-verified schemes which cover compliance with applicable legislation [...]”third-party-verified schemes which cover compliance with applicable legislation [...]”

Role in the risk mitigation - Role in the risk mitigation - Art. 6(c) ““[...] risk mitigation procedures [...] may include requiring additional information or documents[...] risk mitigation procedures [...] may include requiring additional information or documents

and/orand/or third party verification”.third party verification”.

Role of 3rd party verified schemes?

Criteria for assessing their credibility in the Criteria for assessing their credibility in the implementing Regulationimplementing Regulation

Art. 4 Risk assessment and risk mitigation

(a)(a) they have established and made available for third party use a publicly available system of requirements, they have established and made available for third party use a publicly available system of requirements, which system shall at the least include all relevant requirements of the applicable legislation;which system shall at the least include all relevant requirements of the applicable legislation;

(b)(b) they specify that appropriate checks, including field-visits, are made by a third party at regular intervals no they specify that appropriate checks, including field-visits, are made by a third party at regular intervals no longer than 12 months to verify that the applicable legislation is complied with;longer than 12 months to verify that the applicable legislation is complied with;

(c)(c) they include means, verified by a third party, to trace timber harvested in accordance with applicable they include means, verified by a third party, to trace timber harvested in accordance with applicable legislation, and timber products derived from such timber, at any point in the supply chain before such timber or timber legislation, and timber products derived from such timber, at any point in the supply chain before such timber or timber products are placed on the market;products are placed on the market;

(d)(d) they include controls, verified by a third party, to ensure that timber or timber products of unknown origin, or they include controls, verified by a third party, to ensure that timber or timber products of unknown origin, or timber or timber products which have not been harvested in accordance with applicable legislation, do not enter the supply timber or timber products which have not been harvested in accordance with applicable legislation, do not enter the supply chain.chain.

Further explanations in the Guidance document Further explanations in the Guidance document (section 6)(section 6)

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–1919

DG ENV commissioned a study:DG ENV commissioned a study:

The impact of EU consumption of imported food and non-food commodities (e.g. meat, soy beans, palm oil, metal ores) that are likely to contribute to deforestation.

This could lead to considering policy options to This could lead to considering policy options to reduce this impactreduce this impact

NOT ONLY TIMBER…

Mining and minerals are included!Mining and minerals are included!

–2020

Statistics:

Most of EU27 imports of fossil fuels and mining ores are being sourced in either countries which have a very low forest cover or don’t report deforestation;

Most coal is imported from South Africa, Australia and the Russian Federation; most oil comes from Norway, the Russian Federation and North Africa;

mining ores are mainly sourced from South Africa, Botswana and Brazil.

–2121

For imports of minerals (mining of metal ores, uranium, gems, and other mining and quarrying), Brazil is the largest contributor with 26%, and Indonesia with 20%. Brazil is an important source of iron and aluminium ores and concentrates for the EU27. Indonesia for copper ores and concentrates, and gold ores and concentrates of other precious metals.

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Thank you!Thank you!

European Commission DG ENV.E.2"Global Sustainability, Trade &

Multilateral Agreements"

E-mail: Hugo-Maria.Schally@ec.europa.eu;

Website: http://ec.europa.eu/environment/forests/timber_regulation.htm