The EU FLEGT initiative Berlin 11 June 2013 DG Environment European Commission

1. The EU FLEGT initiativeBerlin11 June 2013DG EnvironmentEuropean Commission

2. Background • 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

3. FLEGTActionPlan • Legality as a foundation for sustainability • Main elements • Development cooperation • Public procurement policies • Private sector actions • FLEGT Voluntary Partnership Agreements (VPAs) • Additional legislative options

4. 1. FLEGTVPAs • 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

5. Viet Nam Malaysia Liberia Indonesia Gabon Cameroon C.A.R.. Congo D.R.C. Ghana FLEGT VPA partners Jan 2013 FLEGT licenses (not yet) System development Formal negotiations Entering negotiations Preparation, in-country consensus building Introduction to VPAs Laos Honduras Guyana

6. OtherDialogues • EU-Russia FLEGC • EU-China FLEG BCM • + informal contacts the US; Australia; Japan

7. 2. EU Timber Regulation • 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

8. Legal Framework

9. OBLIGATIONS Duediligence 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 Prohibition The placing on the market of illegally harvested timber or timber products derived from such timber shall be prohibited Traceability Traders shall be able to identify from who they bought the timber products and where applicable to who they have supplied the timber products

10. WHO IS LIABLE? • “Operators” = any natural or legal person who places timber or timber products on the EU market. Liable for: • Exercising of due diligence • Prohibition • “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”

11. 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 Illegally harvested Harvested in contravention of the applicable legislation in the country of harvest

12. risk evaluation risk mitigation placing information

13. Key components of a DDS • Access to information: species, origin, quantities, traders and compliance with legal requirements of harvest country • Risk assessment: certification; prevalence of illegal harvesting; sanctions; complex supply chains, etc. • Risk mitigation: Ex: additional information or documentation; certification, etc. • 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. Negligible risk - where following full risk assessment no cause for concern can be discerned

14. Monitoring organisations (MO) • Legally established within the EU and recognised by the Commission/the EFTA Surveillance Authority • Maintain and evaluate a due diligence system and grant operators the right to use it • Ensure that operators correctly apply the due diligence system • Will be subject to checks by competent authorities • MO assist operators and is an option for operators • Commission in a process of recognising first successful applicants

15. PRODUCTSCOPE • Listed in Annex using EU Customs codes • Covers a wide range of timber products • Does not cover: • Waste and recycled products • Packaging material to support or carry another product • Certain bamboo and rattan products • Other products not listed in Annex (toys; musical instruments) • May be amended to include other products (Chapter 49)

16. EUTR Enforcement: theEUMemberStates • Competent authorities (CA) = national government bodies responsible for the application and enforcement: Check operators; Check MOs; Reports, etc. • 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 • Commission monitors uniform implementation: regular meetings with CA

17. Role of 3rd party verified schemes (certification)? • Recognition of the voluntary certification in the Preamble - Recital (19) • Role in the risk assessment - Art. 6 (b) “[...] Risk assessment procedures shall take into account [...] relevant risk assessment criteria including: Assurance of compliance with applicable legislation, which may include certification or third-party-verified schemes which cover compliance with applicable legislation [...]” • Role in the risk mitigation - Art. 6(c) “[...] risk mitigation procedures [...] may include requiring additional information or documents and/orthird party verification”.

18. Role of 3rd party verified schemes? • Criteria for assessing their credibility in the implementing Regulation Art. 4 Risk assessment and risk mitigation (a) theyhaveestablishedandmadeavailableforthirdpartyuse a publiclyavailablesystem of requirements, whichsystemshallattheleastincludeallrelevantrequirements of theapplicablelegislation; (b) theyspecifythatappropriatechecks, includingfield-visits, aremadeby a thirdpartyatregularintervalsnolongerthan 12 months to verifythattheapplicablelegislationiscompliedwith; (c) theyincludemeans, verifiedby a thirdparty, to tracetimberharvestedinaccordancewithapplicablelegislation, andtimberproductsderivedfromsuchtimber, atanypointinthesupplychainbeforesuchtimberortimberproductsareplacedonthemarket; (d) theyincludecontrols, verifiedby a thirdparty, to ensurethattimberortimberproducts of unknownorigin, ortimberortimberproductswhichhavenotbeenharvestedinaccordancewithapplicablelegislation, donotenterthesupplychain. • Further explanations in the Guidance document (section 6)

19. NOTONLYTIMBER… • 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 reduce this impact • Mining and minerals are included!

20. 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.

21. 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.

23. 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