Examination of Witnesses (Questions 260-279)
MR ELLIOT
MORLEY, MP, MR
BOB ANDREW,
MR ANDREW
SOPER AND
MR JOHN
HUDSON
8 NOVEMBER 2005
Q260 Chairman: So the UK has raised
this issue?
Mr Morley: Yes, on a number of
occasions in the formal talks and dialogues that we have both
in this country within the G8 process and also I have been to
China a number of times myself and had talks there with my opposite
numbers on the issue of illegal logging. Mrs Beckett is there
at the moment at an energy efficiency conference and it is on
her agenda as well.
Q261 Chairman: So when we hear about
these new contracts that are going to be signed to build sustainable
cities in China that were reported in the press, can we be sure
that they will not all be using legally logged timber?
Mr Morley: They are being built
under the banner of eco-cities and there is a considerable UK
input into this in relation to particularly the design and the
architecture.
Q262 Chairman: So the procurement
will be specified, will it?
Mr Morley: That is a matter for
the Chinese Government, not for the UK, but the Chinese have continually
reassured us that they take the issue of illegal logging seriously.
They recognise the damage it can cause. They did suspend all logging
in China for a period because it was linked with erosion flooding,
as a matter of fact. They are well aware of the negative impacts
of illegal logging. I have also shared a platform with my Chinese
counterparts at various international conferences. I think it
was at a partnership conference I was last speaking with them
and talking about the issue of how we can work together in terms
of dealing with illegal logging.
Q263 Chairman: Very quickly, to move
on to the FLEGTT action plan, which you touched on just now, you
seem to be saying that there is little chance of getting any kind
of a multilateral agreement on this issue. Could you perhaps tell
us why this is and whether or not that is something which has
been looked at within the terms of reference of the G8?
Mr Morley: It has been looked
at in terms of the G8 and it has also been taken forward, of course,
in the context of the EU. We have recently had a number of summits,
like the EU India Summit and the EU China Summit, and in the EU
China Summit it was agreed that we would work with China in terms
of combating illegal logging. I think there is a number of approaches
that we are taking in terms of the multilateral approach, and
clearly, that is the most desirable way forward but I do have
to say, in all honesty, that there are some difficulties with
that because there are some countries—Brazil springs to
mind—where finding a multilateral agreement is actually
going to be quite difficult. Brazil is very touchy about these
issues, as I know from my work on international forestry. The
EU approach is a voluntary bilateral agreement base, which has
its benefits. I do not think we should be too apologetic for the
EU FLEGT. It is a significant step forward in terms of dealing
with illegal imports on an EU-wide basis. Of course, ideally,
it would be better as a multilateral approach, but I think that
is an important move forward and it is one I think we can build
on in terms of engaging more and more countries.
Q264 Chairman: But time is running
out, is it not? The time that we have to provide that multilateral
agreement is running out given the destruction there is in forests
at the moment. Is that not something we should be pressing for
now within that G8 framework?
Mr Morley: We should be pressing
for it in every framework, because there are more frameworks than
simply the G8. In terms of reaching international agreement, I
come back to the point that the G8 is not really a forum for international
agreements. There are other international fora where you seek
those agreements, and that is where we should do that. The G8
is quite important in terms of working for that, confidence building,
sharing information, sharing technologies. That is quite useful.
I think the real place for having a major impact on illegal logging
is within the EU because we are a single market and if we really
want to close off markets to illegal logging—and I think
that is the desired end result—the EU is a very important
place for that . I agree with you that there is an issue of urgency.
I also accept and feel the frustration in what I think has been
a slow process, but if you look at where we are today compared
with where we were even five years ago, there has been a remarkable
move forward, both nationally in terms of what we are doing in
the UK, and also globally in terms of the strengthening of the
FLEGT process, the EU FLEGT process, the engagement of Russia,
the engagement of China, Japan and the United States. I think
that is all very desirable.
Q265 Chairman: I think everybody
accepts that there has been progress. The question is, the more
progress you make, how you accelerate the next step. Can I just
turn back to China? You mentioned China, and one of the issues
that has been raised with us is the amount of illegal logging
that is going into China and that is reflecting on what then comes
out of China. In the talks that you have had with China, and maybe
the talks that are going on over the coming days, has that been
flagged up at all?
Mr Morley: Yes, it has, and the
Chinese accept that there is a problem of illegal imports coming
into their country. I actually think that is half the battle.
If you get a recognition by the countries concerned that there
is a problem, you really have the potential for dealing with it.
On that basis, I welcome the fact that Russia also accepts that
there is a problem, actually linked with China. The biggest problems
that Russia has are in eastern Russia and the illegal trade across
into China. There is also illegal trade from Asian countries into
China as well and, given China's economic growth, it is an enormous
market that is pulling in large quantities of both legal and illegal.
There are serious issues here, but they are recognised by China.
I think China does have some capacity problems in relation to
policing and of course, when you do not have established certification
schemes, it makes it all the more difficult in terms of dealing
with this trade.
Q266 Mr Ainsworth: You seem pretty
upbeat about it, and certainly it is true that there has been
progress in the rhetoric around this issue in recent years. The
worry is that that may not be translating into action and illegal
timber is still flooding into the EU. That is the fact of the
matter. Just looking at the FLEGT a little bit more, it seems
to me that there is a vagueness about the objectives. Yes, it
is great stuff, but to "look to assist producer companies",
"in the long term . . . work towards a multilateral international
agreement", "aims to encourage the private sector",
it is all pretty waffley stuff, Minister, really. The only area
where there seems to be some practical progress is in the licensing
scheme. Would you agree with that?
Mr Morley: Yes, I think it is
not unreasonable to say that the FLEGT process compromises in
a whole number of areas, first of all to get the agreement of
the EU, because there are differences in attitude between different
Member States, there are arguments about how far you can go legally
within the WTO context—there are quite complex arguments
about that—there are arguments about whether it is better
to have the voluntary approach or the compulsory, multilateral
approach. If you go down one route it could take you years, frankly,
to negotiate. One of the advantages of a voluntary route is that
you can move immediately. We have agreements with countries like
Indonesia. We have our own MOU with Indonesia, which I think is
very welcome. We will now encourage Indonesia to convert that
into an EU agreement. We know that Malaysia are interested in
negotiating an agreement with the EU, and we know that Ghana is
interested. I think we can see some rapid process in terms of
negotiated agreements with a number of producer countries. It
can also be linked, incidentally, to the kind of aid package that
we have with Indonesia, where not only do we have an MOU in relation
to certified timber, we also provide support through DFID in terms
of capacity building so that they can put in place the kinds of
mechanisms and measures they need to enforce and implement the
scheme. We can do that through the EU with a range of countries,
and I think we can do it pretty fast with quite a number. That
is what I would like to see. So while your comments are not entirely
unjustified, the trade-off that we have to have is whether you
go for an all-singing, all-dancing scheme that could take you
years to negotiate, or whether you go for what has been agreed,
a scheme where you can negotiate voluntary agreements comparatively
fast, and you have a framework that you can build on and tighten
in due course, particularly as the Commission have committed themselves
to the additional measures which will strengthen and add to the
EU FLEGT process. I would like to see a stronger scheme, but I
think what has been agreed is a major advance, and I do not think
we should underestimate that.
Q267 Mr Ainsworth: The trouble is
that some people are singing, some people are dancing and some
are doing nothing. If you put yourself in the position of a Ghanaian
minister—you mentioned Ghana; it is interesting that they
are keen on this, and that is good—would you not feel slightly
uneasy that if you signed up to the voluntary partnership agreement,
your timber producers would very probably put themselves deliberately
in a position where they were being undercut in terms of exports
to the EU by illegal logging and illegal exports?
Mr Morley: One of the things that
we have to do is to ensure and encourage a premium, particularly
for tropical timber. At the moment there is a premium for tropical
timber, and in fact, there is evidence that there is a premium
for certified timber generally. What I can say is that the proportion
of timber sales which are certified—just taking this country,
because we have the figures—has gone up quite significantly
from single figures to over 30% of the market. There has been
a very big increase. So, again, I understand what you say but
I think by policies such as our own in terms of a government procurement
policy, which is being followed by a number of European countries
and there is a lot of interest in it, that is the kind of mechanism
that does ensure that there is a premium for certified timber,
and we are now beginning to see this.
Q268 Mr Ainsworth: But there is no
guarantee of that premium. We have been told that Forest Stewardship
Council-certified plywood from Indonesia and Brazil is not finding
a market here because it is being undercut by cheap imports of
plywood from China, for example. The problem is that the whole
system is full of holes, is it not?
Mr Morley: The system is not perfect
and it will take time to get it perfect, but it can have an effect.
You mentioned plywood; I can tell you, Chairman, that following
the MOU between ourselves and Indonesia, Indonesian plywood exports
to the UK dropped by 50%, and that is because many of the exports
could not meet the criteria. When you have that drop, it means
that those who can meet the criteria can get into the market.
I think there are swings and roundabouts here. I do not underestimate
what you are saying, that yes, there is indeed a risk, if you
have countries who apply good standards and other countries that
do not, of being undercut, but I think what we are seeing in our
own country and in others, who in all honesty have been influenced
by what the UK has done, is the establishment of a certified market
whereby if you are not certified, you do not get into the market,
and I think that is very desirable.
Q269 Chairman: Is that not a case
for multilateral agreements, because what you have just said in
respect of Indonesia could well be giving huge advantages, but
not if then there is illegal timber going into China, which is
then coming through by the back door?
Mr Morley: Yes, we do have to
address the issue of circumvention, and that is one of the additional
measures which is being brought forward by the Commission that
we intend to apply to the EU FLEGT agreement. There are some real
issues there, but I come back to the point that I made, in that
of course, the ideal is to have a multilateral agreement, but
you have to negotiate that probably on an international basis,
and it would take years, and there are some countries who I know
at the moment just would not sign up to it. I always think on
the balance of these things, although my instincts, like, I suspect,
the Committee's, are for multilateral approach, I am interested
in forging ahead and I think on this basis Indonesia will sign
up, I think Malaysia will sign up, and it is quite important having
Indonesia and Malaysia because that deals with a very big channel
of potential illegal timber. I think we can make real progress
on this, and I also think that, as we establish this market, the
market itself will drive the issue of certified timber.
Q270 Mr Hurd: Minister, how do you
define success in this limited, partial, imperfect approach that
you have described? How do you define success, how do you monitor
success, and how long do you give it?
Mr Morley: I would define success
by the percentage of certified timber that is taking market share,
and we are seeing a rise in that already. That is partly because
of the UK policies in the UK. I would define success by the establishment
of certified schemes in all exporting countries in chain of custody,
linked with support for those countries who qualify in relation
to aid for capacity and for organisation, and I would also measure
success by the percentage of forests which are in schemes which
are sustainably managed. You can measure this by the proportion
that is going into this, and I think the measure of success is
to see that proportion increase year on year.
Q271 Mr Hurd: How long do you give
it before reverting to the ideal route, which is the multilateral
route?
Mr Morley: I repeat the point:
if I had my way, it would be tomorrow, but I just think we have
to be realistic in where we are within the international context
and what is achievable and what is not. The market is a very powerful
tool. I have been staggered, Chairman, by the influence in the
market in the UK timber sector by the UK's government procurement
strategies, and also, to be fair, the very positive reaction from
our own UK timber industries and the way that they have responded
enthusiastically, with support from the NGO community. The market
is driving change, and you only have to look at the percentage
of certified timber which is demanded by the market. In terms
of timescales, although we must drive this on through international
agreements and through the FLEGT process and through multilateral
negotiations, I actually think, particularly in developed countries,
that the market will drive changes further and faster than we
can probably negotiate them internationally.
Q272 Mr Ainsworth: You touched on
the way that the Government's procurement policies have helped
the market to achieve some of the changes which you have discussed.
Do you think it would be helpful if there were an EU-wide harmonised
government procurement procedure, which is something that has
been floated by PFC recently?
Mr Morley: Yes, it would be helpful,
as long as it was not at a level lower than we apply ourselves.
Q273 Mr Ainsworth: Lowest common
denominator.
Mr Morley: That is always a risk
with these things, as you obviously understand. I would not want
to be pulled down to the lowest common denominator in these issues.
I am very proud of what we have done in the UK, and it is not
just the Government, although I think the decision to go for a
government procurement strategy has been a very important catalyst.
I am very proud of the way the industry has responded and the
ngo involvement, and it is clearly influenced other countries.
We know that Germany is looking to have a similar system to the
UK, Netherlands, Denmark, Sweden—all these countries are
in the process of putting in place a very similar approach, that
we have pioneered here in the UK. I am not saying everything we
do in the UK has been perfect in this respect. I think there are
areas we still need to develop within our own strategies, but
it has made an enormous difference—faster, incidentally,
in relation to what Mr Hurd was saying in terms of timescale,
than I would have thought in the way that the market is responding.
Q274 Mr Ainsworth: With a little
help and goading from Greenpeace. Where would you recommend that
Greenpeace invest their time and energy now?
Mr Morley: I think Greenpeace
make the point in their own inimitable way. Nevertheless, it does
tend to focus attention on the issue of illegal trade, and it
certainly has an influence on the retail sector.
Q275 Mr Ainsworth: Can I very quickly
ask you about the licensing system which was agreed last month?
Do you think it is robust enough? We have had some criticism from
some of the NGOs that it was fairly watered down in the end, and
the third-party monitoring has been taken out of it. Are you content
that it is sufficiently robust?
Mr Morley: I think, like all things,
it could be made better, and I come back to the point really,
if I am being quite frank with the Committee, you are always going
to get these arguments about what people will and will not agree.
My view is that what we have in the political agreement on the
FLEGT is a good framework for taking these issues forward, and
I do not see it as the end of the process; I see it as the beginning
of the process. We have a framework to develop.
Q276 Mr Ainsworth: Would you, for
example, be arguing in that ongoing process for installing independent
third-party monitoring?
Mr Morley: I think there is a
role for independent monitoring, yes.
Q277 Mr Ainsworth: So you will be
actively arguing for that?
Mr Morley: Yes. I think we have
to look at that, yes.
Q278 Mr Ainsworth: Finally, have
you had any discussions with the Austrian Government, who obviously
take over where we leave off at the end of the year, about their
attitude towards this issue? This is a very partial process at
the moment, is it not, and it will need political will to drive
it forward?
Mr Morley: That is absolutely
right, and we have had discussions with the Austrian Government
and we do expect the Austrian presidency to oversee the bringing
forward of those additional measures under their presidency, and
I know that the Austrians are very keen on this.
Q279 Mr Ainsworth: They have said
that?
Mr Morley: Oh, yes.
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