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WORKSHOP SUMMARY

4th Sub-Regional Training Workshop on

Timber Legality Assurance

22-24 October 2014 VIENTIANE, LAO PDR

A three-day training workshop on timber legality assurance was held in Vientiane, Lao PDR from

22-24 October 2014 with participants and resource persons from Cambodia, Indonesia, Laos,

Malaysia, Myanmar, Thailand, Vietnam, the Philippines, Brunei and India, co-organized by the

ASEAN Secretariat, the EU FLEGT Facility hosted by the European Forest Institute (EFI), and the

Ministry of Agriculture and Forestry (Department of Forestry and Department of Forest

Inspection) of Lao PDR, with strong in-country support from GIZ Laos. Approximately 65

participants consisting of government officials, members of civil society and the private sector

from nine (9) ASEAN member states and the private sector in India, as well as resource persons

from UK DFID - Indonesia and GIZ Lao PDR assisted at the workshop. Observers from the EU

Delegation to Lao PDR, the EU Delegation to Malaysia, the regional office of the EU FAO FLEGT

support program, ASEAN-German collaboration on climate change and forestry, and the Centre

for International Development and Training (CIDT) of the Wolverhampton University were also

present. The workshop agenda covered presentations, discussions, thematic group work and a

field visit to an FSC-certified furniture factory to learn about timber processing, supply chain

control and export procedures. The workshop objective to promote exchange, dialogue and

better understanding on Timber Legality Assurance Systems (TLAS) at the regional level was

well-achieved, as evident through the informative presentations, questions and answers and

friendly exchanges.

In November 2010, the first Sub-Regional Training Workshop on Timber Legality Assurance was

jointly conducted by ASEAN, the FLEGT Asia Regional Support Program implemented by the EFI,

and the Vietnamese Ministry for Agriculture and Rural Development. A second event took place

in Sabah, Malaysia in October 2012, and brought together the Mekong Countries (i.e. Cambodia,

Myanmar, Lao PDR, Viet Nam and Thailand) and resource persons from Malaysia, Indonesia, the

EU and the EU FLEGT Facility. The trainings explored options for increased timber legality in the

Mekong region and provided a platform for exchange of lessons learnt in FLEGT VPA processes,

targeting at the increased implementation of credible Timber Legality Assurance Systems in the

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ASEAN region. A third Sub-Regional Training Workshop was conducted in Kuala Lumpur,

Malaysia in April 2013. The event placed particular focus on increased collaboration between

customs and enforcement agencies within ASEAN, and on interregional exchange between Asian

and African VPA countries.

The fourth Sub-Regional Training Workshop was agreed at the 13th Meeting of the ASEAN

Working Group on a Pan-ASEAN Timber Certification Initiative in June 2014 in Myanmar, and

confirmed by the subsequent 17th Meeting of ASEAN Senior Officials on Forestry in Cambodia.

The event was preceded by the 5th meeting of the ASEAN Regional Knowledge Network on

Forest Law Enforcement & Governance (ARKN-FLEG), after not coming together for almost five

years. Since the last network meeting in 2009, a lot had happened through continuing ASEAN

initiatives on timber legality assurance, as well as through bi-lateral actions between ASEAN

member states and the EU on FLEGT VPAs, and bi-lateral initiatives between member states. The

5th ARKN-FLEG meeting re-examined its regional workplan for strengthening FLEG in ASEAN

(2008-2015) and explored the future role for the network. An update on regional initiatives on

forestry and timber legality assurance and a report on the results of the 5th ARKN-FLEG were

presented to the Training Workshop on timber legality assurance on 22 October 2014.

Objectives

The training workshop had the following objectives:

(a) Enhance the capacity of ASEAN Member States (AMS), in particular the Mekong

countries, to develop and implement Timber Legality Assurance Systems based on

the ASEAN framework and the FLEGT VPA initiative

(b) Exchange practical experience on VPAs and timber legality assurance between AMS

(c) Increase multi-stakeholder collaboration amongst AMS on forestry issues

(d) Contribute to the development of an ASEAN position on timber legality and

associated trade

Outcomes

On the first day, the EU FLEGT Facility and DFID Indonesia presented updates on market relevant

initiatives and shared experience on timber legality assurance, followed by an update by the

ASEAN Secretariat on regional initiatives on forestry and timber legality assurance. In the

afternoon Indonesia presented on lessons learned in VPA/SVLK implementation while Malaysia,

Vietnam, Laos and Thailand shared updates and lessons learned on VPA preparations and

negotiations (links to all presentations are provided in Annex 1).

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The presentations were followed by lively discussions with strong interaction from members of

the audience. General questions included concepts to regulate the legality of imported timber

and timber products, measures to ensure credibility for VPA TLAS, options and requirements for

civil society engagement, differences between TLAS concepts, linkages of VPA TLAS and forest

certification, and market impacts of legal timber. In addition, specific questions were asked

about the systems under development in Indonesia, Malaysia and Vietnam (Annex 2 provides an

overview of the questions and answers sessions).

On the second day, Cambodia, Myanmar and The Philippines presented on their national forest

policies and programmes, and FLEGT related activities in their countries. A special session on

private sector views allowed private sector representatives from India, Myanmar and Indonesia to share their thoughts and experience. Again active questions and discussions followed,

touching on product scopes, terminology, and country specific developments.

The participants then self-selected themselves to join the four working groups to address the following topics:

• Group 1: SMEs and timber legality assurance – how to ensure that SMEs can deliver legal timber?

• Group 2: Timber legality assurance and imports – how to assure legality of imports

(reflecting on approaches under development in AMS)?

• Group 3: Communication on progress – how to address communication challenges related to illegal logging and trade?

• Group 4: Civil society engagement: how to create and maintain civil society engagement

in timber legality assurance processes?

The groups discussed these topics in detail and later presented the results of their discussions

and recommendations from a national and a regional (ASEAN) perspective as follows:

Group 1: SMEs and Timber Legality Assurance

The following general statements and suggestions were made:

• Need for award programs to “model SMEs” doing well on timber legality assurance

• Online programs should be used as this saves time – e-business solutions

• Appropriate tools of communication are needed (local language, business talk, cost/benefit analysis)

• Explore benefits from better supply chain management – e.g. efficiencies in production

• Explore how the image of the entire industry can be changed - green producers • Avoid never ending VPA negotiations – business sector needs clear timelines

• Phased approaches can help - start with a limited number of products, or low risk timber,

or focus on specific milestones. Segregation of material that does not meet legality

requirements might be needed • Avoid parallel systems - integrate private sector solutions

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The following specific suggestions were made to ASEAN/the regional process:

• Help AMS to learn from each other by setting up an ASEAN clearing house of information for countries negotiating VPAs – a support service offering best practices

• Create a website on the legal requirements for timber in AMS

• Encourage capacity building of SMEs. Include other government agencies, e.g. those dealing with transport and customs – explore benefits of working together to streamline

regulation of SMEs

• ASEAN could create a specific SME support program (including awards) to encourage

implementation of stepwise solutions on legality assurance • ASEAN could also develop a legal framework for all member states on timber legality

(ASEAN has already started this with its criteria and indicators on timber legality)

Group 2: Timber legality assurance and imports

The following general statements and suggestions were made:

• Due Diligence System (DDS) with risk-based assessment is the most appropriate way of dealing with the legality of timber imports. It needs to be explored who should conduct

DDS - Customs/Competent Authorities versus Operators/ Importers. Capacities and

control procedures are important in this context

• Timber harvesting countries should provide clear documents of legality and inform each other about existing procedures – assessment of these documents are the core of DDS

• The risk of laundering timber through confiscation should be assessed

The following specific suggestions were made to ASEAN/the regional process:

• ASEAN to encourage its member states to inform each other about systems and

procedures in place – e.g. concerning specific bans/prohibitions, work on integrated

online systems, and links to the ASEAN single window system • ASEAN to encourage that member states provide clear documents demonstrating timber

legality

• ASEAN could develop, as part of a regional framework, guidelines to recognize systems

used by each member state

Group 3: Stakeholder support and communication challenges

The following general statements and suggestions were made:

• Communication is a continuous process from planning stage to implementation

• Communication needs a strategy:

– Conduct of massive Information Education Communication campaign – Lobby with law makers

– Engage with affected parties

– Directly engage with media

• Communicate nationally, regionally and internationally on achievements concerning timber legality

• Use different tools to communicate with specific target groups

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• Communicate when ready (be proactive):

– When we know what we want to achieve

– When we have the information – When we know whom to communicate with

Group 4: Civil society engagement

The following general statements and suggestions were made:

• Involve civil society in all phases of the process; in VPA pre-negotiation, negotiation,

implementation and monitoring, in all phases but possibly with different degrees • Provide capacity- building and support to CSO communication

• Learn from other countries that have made progress in VPA processes

• Put FLEGT in a larger context of interest to civil society; tie to other topics (e.g. community forestry)

• Integrate local knowledge to VPA process (helps ownership-building)

• Ensure that civil society voices are heard

• Ensure protection and safety for civil society actors through ensuring open political/open space for them

• Create and ensure political will to invite civil society to be involved in the VPA process

The following specific suggestions were made to ASEAN/the regional process:

• Build an ASEAN network of civil society engaged in FLEGT

• Establish an ASEAN Civil Society Forum on FLEGT that meets regularly

The workshop was concluded with a visit to a Lao Furniture factory arranged by GIZ Laos with

the kind assistance of the Department of Forestry and Department of Forest Inspection of Lao PDR. The group was briefed by Mr. Thongsavanh Soulignamat, owner of the factory and

President of the Lao Wood Processing Industry Association (LWPIA) on the tracking of timber

and documentation of timber sources.

The success of the workshop is attributable the informative presentations by resource persons

and country representatives, the active participation and good and open exchanges, the conduct

and structure of the workshop and the generous hospitality of the host government. All participants wish to convey their appreciation to the sponsors of the workshop, the workshop

facilitator, the contributions of the resource persons, and the excellent logistical arrangements

made by the secretariat. The workshop was held in the traditional ASEAN spirit of cooperation

and solidarity. Outcomes will be forwarded to ASEAN to be reflected upon when developing the forestry part of the ASEAN Strategic Plan of Actions 2016-2020/2025.

Vientiane, Lao PDR,

25 October 2014

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Annex 1 – List of Presentations

Introduction to workshop programme By: Alexander Hinrichs

Update on international activities to promote timber legality and good governance

By: Alexander Hinrichs

Approaches to Timber Legality Assurance: Concepts and lessons learned

By: Andy Roby

ASEAN: Update on regional initiatives on forestry and timber legality assurance

By: Dian Sukmajaya

ASEAN: Results of the 5th meeting of the ASEAN Regional Knowledge Network on FLEG By: Ir. Teguh Widodo

Indonesia: Lessons learned in VPA/SVLK implementation By: Ir. Teguh Widodo

Update on Malaysia – VPA negotiation

By: Ms. Sunita Muhamad

Update on Vietnam – VPA negotiation

By: Mr. Tran Le Huy

Update on Laos – preparations for VPA negotiation

By: Mr. Phoxai Inthaboualy

Update on Thailand – preparations for VPA negotiation By: Mr. Banjong Wongsrisoontorn

Update on Cambodia By: Mr. Khorn Saret

Update on Myanmar

By: Mr. Pe Chit

Update on Philippines

By: Mr. Raul Briz

Private sector views from India

By: Mr. T.R. Manoharan

Private sector views from Myanmar By: Mr. Myo Lwin

Private sector views from Indonesia By: Mr. Agus Hermansjah

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Study on the possible establishment of a sub-regional information and intelligence sharing

mechanism

By: Mr. Bruno Cammaert

Overview on Sustainable Forest Management in Laos

By: Mr. Bounpone Sengthong

EU FLEGT Impact on Lao timber trade

By Mr. Thongsavanh Soulignamat

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Annex 2: Main points of discussions (Questions and Answers)

1. Are verification systems in place for non VPA exports to VPA countries? Are these government to

government arrangements? How do these relate to the EU Timber Regulation (EU TR)?

All VPAs have a requirement to ensure that all imports into VPA partner countries are legal, otherwise the

EU may be inadvertently undermining its own EU TR, as FLEGT licensed timber is accepted freely into the

EU without having to go through due diligence as defined by the EU TR.

Indonesia informed that they have drafted a timber import regulation which mirrors the EU TR, where

Indonesian importers undertake risk assessment on the legality of imported timber. The Minister of Trade

has just signed it into law, effective from February 2015. The Ministry of Forestry will further outline the

system, which places the responsibility on the importing operator. This does not immediately mean that

Indonesia will be able to send FLEGT-licensed timber to the EU, as the implementation of the FLEGT VPA

does amongst others depend on the implementation of the timber import regulation. Indonesia further

informed that export licenses for V-Legal timber have been issued since early January 2013, and stressed

that the Indonesian SVLK system had been in existence as a national legislation since 2009. The VPA with

Indonesia builds on the SVLK, with additional elements added to reflect VPA fundamentals.

Vietnam informed that it wants to put the responsibility for controlling imports on Customs. The issue is

under discussion with the EU. Participants realized that the issue of regulating imports is also relevant for

Malaysia and Thailand, while wood in transit, not imports, are more of an issue in African VPA countries.

2. What is done to ensure that the TLAS system agreed under a VPA works?

The system includes regular independent audits to ensure that the system is functioning. Any system

related problem is referred to the Joint Implementation Committee (JIC) that oversees the agreement.

3. Out of VPA negotiating countries in Asia, are there any which are operator-based like Indonesia? Or are they

all shipment-based?

Malaysia, Vietnam and Thailand’s FLEGT-licensing system will be shipment-based. The reason why Indonesia

developed an operator-based licensing system is because the country is enormous and has thousands of

operators. Indonesia informed that the onus falls on independent, accredited auditors to check on

compliance and governance. The SVLK is a national licensing system offered to the market – for exports to

the EU it is an intermediate measure prior to FLEGT licensing. Australia has just accepted the SVLK as low

risk timber.

4. What will be the market impact of VPAs? How will they help to reduce deforestation and climate change?

Predictive forward-looking market impact studies were carried out by Malaysia and Indonesia at an early

stage of the VPA negotiations. They looked into market benefits – like the ease of having similar

requirements from all EU Member States, and the market advantages of being first movers. There were

also questions as to the acceptability and whether all EU Member States would equally live up to their

commitments. That was why a proposal for an Independent Market Monitor (IMM) was made, a function

which the EU has recently awarded to ITTO. However, since no FLEGT-licensed timber is as yet available,

measuring market impact is currently rather difficult.

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Proper forest law enforcement and governance is a precursor to climate change mitigation and a necessar y

condition for sustainable forest management. The FLEGT VPA concept uses trade as a leverage, to make

sure governments stand behind the FLEGT-licensed timber to vouch that laws have been obeyed and are

not broken through payments to circumvent them. In this way, the EU hopes to make a difference to forest

governance but because there are bigger markets than the EU in Asia, like India and China, steps have also

been taken to engage with these two huge consumers.

5. Will two audits be required of Indonesian exporters if operators in the EU require both FSC and SVLK?

Permit holders who have FSC will still have to implement the SVLK as it is a mandatory requirement. No

exports are possible without the SVLK, even if companies are state-owned and/or FSC certified.

6. Why has the Malaysian VPA excluded Sarawak? Is the MYTLAS from Peninsular Malaysia only for the EU

market?

Malaysia informed that under the VPA negotiations, Malaysia agreed to develop three sets of TLAS – one

for Peninsular Malaysia (PM), one for Sabah and another for Sarawak (which is on hold). PM has a

temporary MYTLAS license which would become a FLEGT license after the VPA with Malaysia is operational.

Malaysia uses MYTLAS licenses only for the EU market. The Malaysian industry has been requesting for

MYTLAS to be extended to other markets, but a decision on use for other market destinations has not yet

been made at the Ministry of Plantation Industries & Commodities. The MYTLAS is different from the SVLK,

which is issued by an independent auditor. The MYTLAS is issued by the Malaysian export licensing

authority.

Under the federal Constitution in Malaysia, forestry is under the jurisdiction of the states. Sarawak state

has decided on a phased approach to its TLAS development. The VPA negotiations are with federal

Malaysia, which includes Sarawak. Currently, the EU and Malaysia are looking into language that would

properly frame Sarawak’s involvement, and ensures that there is no mixing of Sarawak timber with that of

PM and Sabah until a TLAS for Sarawak has been developed and agreed.

7. How much do exporters in Vietnam have to pay for permits/licenses.

Vietnam informed that costs, and whether to charge for these, has not yet been decided.

8. How does a country integrate smallholders?

Indonesia shared that it is looking into implementation of ISO 17050 – Suppliers’ Declaration of Conformity

for low risk timber from privately-owned forest and lands, and also from household industries.

9. Are FLEGT licenses applied once only per operator or are they needed to be applied for every shipment?

Vietnam intends to issue for each shipment. A database will be built up to manage the issuance. The EU

requires that each shipment of the products covered in the VPA is FLEGT licensed.

10. FLEGT for legal timber is considered a minimum requirement to the EU market. Malaysia has the MTCS for

timber certified as sustainable. Is there any inter-linkage between the two?

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They are parallel systems but the Malaysian government and also the Indonesian government had both

decided that they would not be integrated, unlike in Cameroon.

11. How does the MYTLAS cover imported timber?

Malaysia informed that negotiations are still ongoing and the issue of imports is still on the table, not only

for imports from Indonesia, but also for non-VPA timber and timber from Sarawak. There will be a

mechanism to separate or segregate PM/Sabah and Sarawak timber. The present timber import procedures

will be examined. If for example, a signed Indonesian Export Declaration is received, and it goes through

the proper channels, Malaysia will treat it as “good and well”.

Participants highlighted that the EU must demonstrate that all 28 EU Member States will take action and

that there will be a standard and credible procedure for the procurement of timber which is non-FLEGT.

In Vietnam this week there will be discussions on how to regulate imports. It makes the European

operators’ job much easier if exporters have systems in place.

12. Vietnam’s product scope for the TLAS uses 6-8 digits product codes under the Harmonised System for

Chapters 44 & 94, while Indonesia uses 4-6 digits only. Why is this different?

The 8 digits specify down to the species of wood used e.g. “kitchen furniture in pinewood”. The Vietnam

product scope is still under negotiations with the EU. The EU will have to ensure that customs within the

EU as well as the customs in the VPA partner country are able to fully understand the agreed product

scope.

13. How has Vietnam been able to engage civil society? Is there a mechanism and how did they contribute to

the process?

Vietnam informed that there is a CSO network which has been set up, and a coordinator appointed. The

government invites CSOs to consultations. There has been support from the EU, FAO and FERN. The VPA

contains a requirement to assess the social impact of the VPA, so livelihood impact assessments will be

done.

14. What is the role of civil society, what are the difficulties faced and are there clear responsibilities and roles

outlined for government, civil society and the private sector?

It depends on each country’s situation. Laos informed that civil society does not participate in every activity

and that there is still learning by doing. The aim clearly is to make the process more participatory, not just

only involving the government and private sector.

In Indonesia, civil society had roles throughout the process, from negotiation to implementation, as well as

monitoring, through an Independent Monitor Network. A CSO Forum has been created and meets at least

once a year. It includes labour associations, indigenous peoples and non-government individuals. Self-

elected formal representatives from different regions are involved in VPA oversight.

There are no terms of reference clearly defining CSO involvement for every step of the process, as VPAs are

country specific. Involvement of CSO lends credibility to the result and is therefore very important.

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Thailand informed that there are 5 representatives in the Thai Legality Working Group who are self-

identified. Encouraged by the EU FLEGT Facility, and assisted by RECOFTC, CSOs have been involved in

discussions and learned about FLEGT up to the provinces. With this engagement, CSOs could identify their

own positions in the FLEGT negotiations and formulated inputs, aiming at reforming forest governance in

Thailand.

Where there are national offices of the WWF in countries, WWF seeks to play an active role. WWF played

e.g. an active role in Sabah that included capacity-building for indigenous peoples. The final decision on

CSO involvement lies with the government.

15. Is there a potential problem that FLEGT licensing could cause delays in shipment?

To enable efficient processing, the licensing information system must be linked to trade and customs

systems. This is the case in IDN, and is envisaged in other VPA countries.

16. Will ASEAN market integration under the AEC by 2015 affect discussions as ASEAN becomes a single

market?

In these discussions, tariffs and other trade issues currently feature most prominently. Regulating trade in

legal timber and sustainable forest management will take some time and the approach will most probably

be step-by-step or phased. ASEAN integration and individual country efforts on production and trade in

legal timber should be linked.

17. Legality and SFM certification. What is the linkage from a regional perspective?

Certification is legally non-binding and not the same as what is negotiated with the EU under a bi-lateral

VPA. The VPAs frame what countries are developing in their national TLAS. At the ASEAN level, a set of

legality criteria and indicators have been identified under a phased approach to regional certification, and

countries report back on their progress of developing national legality assurance systems. At individual

country level, in developing their legality standards, ASEAN member states refer to the ASEAN standards

and make sure that there is sufficient overlap. There is no ambition to create a regional certification

institution under ASEAN, although this was discussed a number of years ago.

18. What products go into VPAs? Does it cover logs/lumber, plywood and veneers only?

The primary processed timber and timber products are minimum products under the various HS Codes to

be covered under a VPA. Coverage of secondary products is for the negotiating country to consider. So far,

all VPAs have included a broad range of products, and more lately considered the requirements under the

EU Timber Regulation as guidance when developing their product scope for the VPA.

19. Is there confusion on the understanding of the term “TLAS”? TLAS outlines the control procedures for

FLEGT licenses. It is also loosely used to make a checklist of existing legislation and verification procedures.

There is no copyright on the word “TLAS”. If there is a communication issue, can the world of certification

and VPAs be linked and made into one so that there is clear communication?

FLEGT VPA negotiations are bilateral processes that take place between the responsible government agencies in a VPA country and the EU, by involving/consulting with national stakeholders. The intermediate

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licenses that are currently being used by some countries still developing their systems are different from a

fully developed TLAS resulting from a VPA process. Indeed there is a communication issue, in particular if systems in development or private sector schemes are also called TLAS. However, all efforts to better control timber legality should be promoted, whether under a VPA or not. Linking VPAs and certification is possible, but these do not automatically replace each other.

20. How will the tracking system the Philippines plans to develop look like?

The upcoming Philippine wood tracking system will trace the timber back to stump by using the Radio

Frequency Identification Device (RFID) technology. It will be pilot tested by 2015. 21. Is the Indian government taking measures to help operators towards sourcing legal t imber so that Indian

operators who export to the EU are in compliance with the EU TR? There has not been specific action related to the EU TR and emerging market legislation by the government of India yet; the focus has been more on endangered species and wildlife trade control. Awareness has

been raised through efforts conducted with support of the EU FLEGT Facility, in particular in the private sector, but more needs to be done.