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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 607-ii House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE ENVIRONMENTAL AUDIT COMMITTEE (SUSTAINABLE TIMBER SUB-COMMITTEE)
Tuesday 1 November 2005 MS SASKIA OZINGA, MR NATHAN ARGENT, MR JOHN SAUVEN, MS BEATRIX RICHARDS and MR ANDREW LEE MR DUNCAN BRACK, MS JADE SAUNDERS and MS EMILY FRIPP MR MIKE CLARK, MR MARTIN GALE and MR BEN GUNNEBERG Evidence heard in Public Questions 165 - 253
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Environmental Audit Committee Sustainable Timber Sub-Committee on Tuesday 1 November 2005 Members present Joan Walley, in the Chair Mr Peter Ainsworth Colin Challen ________________ Memorandum submitted by FERN, Greenpeace and WWF
Examination of Witnesses
Witnesses: Ms Saskia Ozinga, Director, FERN; Mr Nathan Argent, Forest Campaigner, and Mr John Sauven, Campaigns Director, Greenpeace; Ms Beatrix Richards, Senior Policy Officer and Mr Andrew Lee, Campaigns Director, WWF, examined. Q165 Chairman: May we welcome you to our Committee this afternoon. I would like to begin by inviting each of the organisations, Greenpeace, FERN and WWF, to give us an initial introduction just to set out how important this issue of illegal logging is and why it is so important in respect of the world's forest, just so that we can get a broader and bigger picture of the context within which this inquiry is taking place. Mr Lee: Thank you very much, Chairman. I would like to lead off, if I may, on behalf of the group - I am Andrew Lee from WWF - but we have discussed some key points before your hearing today. I just wanted to make four points by way of introduction to the case, if you like, that will be illustrated by a lot of the evidence amongst the group here. The first point is just to go back to the basic fact that forests are disappearing globally at a colossal rate. If we are looking at tropical forest, we are losing forest still at the rate of 45 football pitches per minute. If you looked in terms of the area of the UK you would be clearing the area of the UK every two years. So the scale of the problem is still immense, and the need to tackle it - the urgency. In biodiversity terms, in Borneo three species are being discovered every month, far more if you look in detail at invertebrates; 80 per cent of orang-utan habitat has disappeared in the last ten years; if you look in the Congo Basin, Western Lowland Gorillas decimated in some places, reduced by 90 per cent in fact by the introduction of the Ebola virus driven by forest clearance. This is not just a problem in terms of biodiversity, it is also, of course, a colossal issue in terms of climate change, both in undermining and destroying the capacity of the great forest systems of the world to regulate the climate but also in terms of the emissions created through, particularly, illegal logging. So forests are disappearing, point one. Point two, the supply chain itself is now threatened. If you look in the future, currently the EU, we estimate, is sourcing 3 billion euros worth of timber going into the hands of criminals, and if you extend current trends into the future for certain tropical timbers the limiting factor within ten years will be resource depletion - there will be no resource available. So in pure supply chain terms this is a colossal issue. Of course, a lot of this timber is going for uses which are the ultimate in wasting a natural resource; for instance, paper pulp. In terms of what needs to be done there are two points we want to make there. The first is in terms of the FLEGT action plan (the Forest Law, Governance and Trade) at EU level, and the core of that is the licensing regulation. From the point of view of the NGOs here what we have seen is a very strong and robust action plan originally, in 2003, turned into what is an extremely weak and very disappointing licensing regulation. In fact, the current draft is so weak we think it is effectively meaningless and will fail to deliver any significant impact on illegal trade, and it would need separate legislation as well as a huge tightening up of that existing regulation to control the import of illegal timber and forest products into the EU. Currently, we see the UK, in the Presidency of the EU, presiding over this very, very weak legislation. The final point is on CEPT (Central Point of Expertise on Timber) in the UK. We think this is a good initiative, the Government has been in a leadership role in Europe and globally in going for this. However, the way it is actually being interpreted and put into practice is a grave cause for concern because the criteria, which themselves are quite robust, which allow you to decide which forest certification schemes are effective in delivering sustainable forest management, are not being interpreted correctly, we believe, and are actually failing to give the right weighting. So, in fact, they are giving credence to certification schemes that do not deserve that credence, and this undermines the legitimacy of things like the Forest Stewardship Council (the FSC) scheme. So CPET is good but needs a huge amount of work to make it effective in terms of how it is used and to actually translate it into procurement policies across national government departments and then also, of course, to reach out into local government, for example, in terms of procurement. So forests are disappearing, the supply chain is under threat, the European proposals are extremely weak and very disappointing; CPET has potential but needs a lot of work to make it more robust. Q166 Chairman: Thank you for that. We will be coming on to some of the detailed aspects of that, but just before we do I would be very interested in your views as to why there is not a political will to really deal with this issue, given that you yourself have mentioned climate change? It just strikes me, with the huge problem and challenge you have presented to us, why you feel there is not really the political will to deal with this. It is your efforts that are endeavouring to bring about a change but that does not seem to be matched internationally and across the European level. Mr Sauven: Just in response to that, we got a letter from Margaret Beckett last week on this issue about the process going through the EU at the moment. In the letter she said that she herself was extremely frustrated by the slow progress that was being made, and I think this is one of the issues that this has been going round and round in circles through the Commission, through the Member countries, back through the Commission and Parliament, and so on and so forth, and not only is there very little progress being made but it also seems to get weaker as time goes on. I think this is one of the reasons why we have been trying to pressure the UK Government to maybe act more unilaterally if it is not going to get action at an EU level. Q167 Chairman: Just zooming in, if you like, on the individual aspects of all this and the issue of certification, which you did refer to, we would like your views about the different certification schemes that there are at the moment and that have come into existence over the last five years. There is more than one of them. Is that beneficial? Is everyone trying to jump onto the FSC bandwagon? Do you feel that the standards that FSC has are high enough, or too high, and how does that relate to developing countries? Do you believe that because the FSC apparently seems to have a high standard that is one of the reasons why there is such a plethora of other ones, because of their relationship to developing countries? Ms Ozinga: The first thing to say is, of course, the FSC was the first one and it was established by a multi-stakeholder process with the timber industry, with environment NGOs and social groups all sitting together to design and implement the programme. Subsequently, many other schemes (there are, in total, eight or nine, depending on how you count them) have come into operation, but almost all of those fall under the umbrella of the PEFC at some stage, or at least are trying to get under the umbrella of the PEFC. So, in effect, you have the programme for the endorsement of forest certification schemes as one and then the FSC is another, which narrows it down to only two operational systems, if you like, in the long term. All of us certainly do not think that the FSC sets its standard very highly; in fact, I think you can say that if we wanted to, almost the whole of Europe and a large part of the rest of the Northern Hemisphere, could be potentially FSC-certified over the long term. There is also some criticism of FSC which also shows that, clearly, the standards have not been set too high. When you talk about tropical countries, yes, there definitely is a problem. but it has always been put to you, probably, and also to us, that the FSC is undermining development in the tropics because it cannot certify practices in the tropics. However, if you look at the timber trade as a total, there is only 10 per cent of tropical timber coming into the market, and the percentage of certified forest in the tropics is not that much less. So it is very easy to distort statistics here by saying you cannot get a timber certified from the tropics; you have to see it in the context that the timber trade from those countries is much lower than it is in the Northern Hemisphere. Maybe I should leave it at that and give the floor to Beatrix to go a bit more into detail. Ms Richards: I was going to give some practical examples about what it would mean if you, for example, were a forest owner and the FSC were to come to your door. The process you go through (this is some of the research we have done) to get FSC certified is that a man comes to your door, he has a big clipboard, he has a whole list of common criteria which you will be checked off against. He will go out into the forest, he will look at how you are managing the forest on the ground, he will talk to all the stakeholders - ie, all the neighbouring landowners and people that have an interest in that forest - he will look at the operations on the ground to assess your health and safety, look at whether the guy in the harvesting cab is wearing a protective helmet, and all this kind of thing, and then he will come back every year and make sure that the management practices that you had in place are still operating; that you are still complying with that scheme. That is the way the FSC operates. Also, the way the standards are put together is done in a consensus process between environment and social and economic stakeholder groups, and they all have an equal weighting in that decision-making process. With PEFC, if you are in Austria, for example, you get a letter in the post, and it says: "Would you like to be PEFC certified or would you not like to be PEFC certified?" You tick a box, you send it back and that is, basically, all that happens. That has actually happened to WWF; we own some forests in Austria and we received this letter in the post. We ticked the box that we did not want to be PEFC certified. This happens in France, in Germany and it varies between the countries; there is no common consistency in the schemes across the countries in which it applies. If it is SFI you can define your own criteria, so you decide how you actually want to be assessed and on what elements you are going to be assessed, and then also you do not actually have to have any system in place to check where your timber is coming from, where it ends up or anything like that, so it has no effective or mandatory chain of custody. Q168 Chairman: What would be the absolute minimum standard that you think should be there for any system of certification that is looking for sustainability that actually guarantees it? Ms Richards: It is FSC. The four core values we have are absolutely critical to the process, if I can just find them: meaningful and equitable participation of all major stakeholder groups in governance and standard setting; reliable and independent assessment of forest management (chain of custody); certification decisions are free of conflict of interest or parties with vested interest (that would be your decision-making process that you would have just industry members there and they would dominate that decision-making process; you would not have other stakeholders, like environment or social groups) and also transparency in decision making and reporting. One of the things we have gone through is we looked at corrective action requests, which are things that FSC puts in place to make sure you comply with their criteria, and you can actually check for every scheme how they put those things in place, whereas for PEFC or for other schemes, this is not transparent; you cannot find anything on the web, you cannot 'phone anybody up and ask about it. Q169 Chairman: When we had Timbermet to give evidence in our inquiry last week - I am not sure whether or not you have had a chance to see the evidence we received - we were told by Simon Fineman that much as they would like to see all timber purchases being certified, basically they told us that for the next ten years we would be living in cloud cuckoo land (he did not use those words, those are my words); it would take at least ten years before anything like FSC standard could be achieved. What is the solution? It is a question of do we do nothing now or do we wait ten years? What do we do about this problem that there is without getting so many different countries to sign up to this? Mr Lee: I think one or two people might want to come in. This is clearly an issue about how you close the gap between where we are now and where we need to be in the future. I think from our point of view there needs to be a package of measures, including the controlling of illegal logging, which is absolutely vital, but also the proper implementation of certification schemes. Demand management is another issue: demand for some products, eg virgin pulp for paper, cannot continue to spiral at the level it is doing now and be met sustainably. All of these different measures need to come into play over time. It is simply not an option. I think we cannot say that we have an option to continue with illegal timber trade because of the impact on the forest but, also, the devastating impact on the countries where this illegal trade is happening in terms of livelihoods destroyed, legitimate income streams subverted and money going into the hands of criminals. So we do need to look in the long term at how to get from where we are now and where we need to be through a combination of different measures, not just one measure. Certification is only one tool. Ms Ozinga: Can I add one thing to that, which is the reduction of consumption, which is an issue that has not been talked about enough. If I am not mistaken, the Scottish procurement policy actually does look at the reduction of paper consumption. When we talk about reduction of consumption we do not mean the reduction of consumption of timber as such but we do mean the reduction of paper and pulp, because that is where the increase in growth is and we really should not see any more increase in growth in that area. That is the very first step that needs to be addressed, and then you need to look further at how you can close that gap, in looking at matters which Andrew just mentioned. Q170 Chairman: When I hear you making these points to us there is a real sense of urgency and a real passion about what needs to be done. I have to say that that did not come over to us in the evidence we took from the FSC last week. How is this issue going to be taken further forward? Ms Ozinga: I do not think that is an issue which the FSC can take forward because the FSC is an independent system which does nothing but, if you want to say it in that way, accredit certifiers who then assess forest management systems. It is, if you like, almost a technical body which assesses forest management. It is up to us, to you and to governments to really take the action forward. I fully agree with you there is an enormous urgency there, but I am a little bit more positive than you are because I have been doing this for more than 20 years now and if you look back five or six years ago forests were not at all on the political agenda any more - like it was in the 1990s - now, at least, it is back on the political agenda to some extent. So at least this whole debate is starting up again and, hopefully, going more forward in the future. However, there is a massive urgency and there are an enormous number of tasks for governments and for us, environment and social NGOs, and for the industry to do. Mr Sauven: I think there needs to be some more joined-up thinking as well, because, for example, today the Government is discussing climate change with all the G7 and G8 leaders and with China and India, and so on, and I think there is a big issue here that the rainforests that are being set alight in the Amazon and other countries is contributing unknown quantities - somewhere between 15 and 25 per cent of CO2 emissions are coming from burning the rainforests. All the measures and all the savings that we are trying to make on CO2, which is extremely difficult and which is going up in flames in these forests, is absurd because the first thing you should stop doing is actually setting fire to all these forests. We are not only wrecking the climate but, also, wiping out biodiversity and so affecting forest-dwelling people. That is the first measure. This needs to be looked at more holistically, because if you are going to deal with the issue of climate change you have got to deal with the issue of what is going on in the forest. The other thing is that I think if there is to be any chance of there being any sustainable trade you have got to stamp out the illegal trade. It is a bit like saying, for example, with the car industry, that there are stolen car dealers and legitimate car dealers. How can a legitimate car industry operate alongside a stolen car industry? It cannot; it will always be undercut. The fact of the matter is, as of right now, for example, as we showed recently in our report on ply coming in from China (I do not blame China - we are the people who are consuming it) they are undermining legitimate trades. So when we said to Indonesia "Go FSC" some companies went FSC and their timber remains unsold in timber yards around the UK because it is being undercut by Chinese plywood. We said the same to Brazil in the Amazon rainforest - "Get FSC certification" - and their products remain unsold in timber yards around the country because it is being undercut by Chinese plywood. That is all laundering illegal timber from the rainforests of Papua New Guinea, from the rainforests of Africa. You cannot have a legal and sustainable trade going on alongside an illegal and criminal trade. The Government understands that, everybody understands that - even the timber trade understands it. If you go into a timber yard they will tell you: "We have got FSC but Chinese ply is cheaper, so why don't you buy Chinese ply?" If they are allowed to get away with it they will get away with it, and that is what we have to stamp out. Q171 Chairman: Finally, in respect of certification, going back to trying to get a minimum standard in respect of what is needed, putting aside what you said about there needs to be political leadership to deal with that, where would you see the leadership coming from across the different certification schemes that there are, so that we end up with a higher standard rather than a lower one? Ms Richards: I was going to add that I think the issue is not so much that the certification schemes need to take the initiative but the industry and the people that are buying and the Government have to take the initiative to drive this process forward. The key thing in this is not to be overwhelmed by the sheer scale of what we face because there are ways of being able to work through it. WWF, through its global forest and trade network, adopts very much a step-wise approach and, depending on which country they are dealing with and the structures that they already have in place in that country, it starts at a low level, it starts at a medium level, it could start at a higher level. So the step-wise approach would go from known sources, go to legality, go to being able to verify where their timber is coming from and being able to go through the chain of custody until, eventually, they get up to being able to apply a certification scheme to the timber that they are selling. So that is a key thing. Also, in terms of the supply gap and the issues on actually making sure that the industry is sustainable, we are going to have to do that and we are going to have to look at things like product innovation, greater efficiency and reduction in demand in order to be able to meet that. These are all things that can be done, and are already being put in place in some situations. Ms Ozinga: Just to add to that, the certification schemes are nothing but tools; it is up to government, listening to all the stakeholders, to set the standards. To some extent, that is exactly what the CPET process has done. The CPET process has developed criteria for what they would consider to be credible certification schemes. I think most stakeholder groups would agree with me that the process of developing those criteria has been quite good because they are supported widely across the board. Where we think the process has failed is actually in assessing the certification schemes on the basis of those criteria. So certification schemes themselves are just tools, they are not initiators in any way. Q172 Colin Challen: That leads me on to the next question, really, which is telling us a bit more about the approach that Pro-forest used and why you are unhappy about it. Ms Ozinga: Pro-forest assessed all four certification schemes (not all of them but those four schemes) on the basis of those criteria which were developed by the CPET process (we did the same) and they looked at 26 points. With the PEFC we disagreed on 13 of those assessments and with the SFI we agreed on 18 of the 26 points, so there is a big gap in how Pro-forest believes they should assess the schemes and how we believe we should assess the schemes. We can send you the document with the assessments so you can look in detail, or I can mention a few points. We put that to Defra and we put that to Pro-Forest and, to some extent, they agreed with our concerns, and that is the reason that they have only given the PEFC a six-month probation period, and for the SFI they have only allowed SFI timber which has a chain of custody, which at the moment is almost non-existent. Our demand towards the Government and towards CPET is to develop a much more rigorous system to assess these schemes, which really looks properly at the criteria and which schemes meet the criteria. Also, as a slightly separate point, we believe that probably some of the schemes, if you assess them on paper, show different results from when you look at them in relation to what is happening in the field. A big gap, if you like, in the CPET scheme is that it only looks at a paper assessment and does not actually look at what is happening in the field. At some point you would have to include in the CPET process a review to see if what is happening in the field is matching what is being set on paper. Q173 Colin Challen: Can you illustrate that point with a particular point out of the 26? Ms Ozinga: Maybe an interesting one is the CSA. I think most of us would agree that if you look at the paper assessment, the CSA, which is the Canadian scheme, does meet a lot of these criteria. However, we do know that there are 13 complaints put forward by environment NGOs and by indigenous groups in Canada about almost all the CSA certifications, while the Pro-Forest assessment says that there has been proper consultation, that environment groups and social groups agree with the certifications, that indigenous rights have been taken, more or less, properly into account - all these things are on paper done but if that has been done on paper how can it happen that almost all the CSA certifications have been challenged by NGOs? There has to be something not quite right there. Ms Richards: We also have two documents, which we can give you, which set out exactly, just on the reassessment criteria, what was done. There was obviously an initial assessment carried out and then they reassessed on the basis of PEFC and SFI having made some changes to their schemes, and we have actually got the documents here. Q174 Colin Challen: Looking at the PEFC, what happens at the end of the probation period? How is it reassessed? Will these criteria, and so on, be thoroughly looked at again? How will that be sorted out? Ms Ozinga: We do not know how it will be sorted out. We put forward that we would want it to be sorted out and that we would like to have a review within six months. We hope that it will be reviewed in six months, and that the evidence which we put forward will be taken into account then. Maybe just one point on the PEFC, just to highlight the problems of interpretation of the CPET criteria: one of the CPET criteria is that the standard-setting process - ie, the process which defines which timber is allowed to get the label of sustainable (which it is not) should be done with the balanced participation of different stakeholder groups. That is what the CPET criteria say. The FSC scheme allows only the forestry industry or only the forestry owners to actually set the standard without any environment or social NGOs involved. They still pass that criteria, which we think is old - it should not pass that criteria. The reasoning of Pro-Forest is that the PEFC does say that the standard-setting should be done by consensus and, therefore, they pass the criteria. We think that consensus of one stakeholder group is something very different to consensus across mandatory different stakeholder groups. That is how you can end up with these criteria very differently. Q175 Colin Challen: Moving on to PEFC, they describe themselves in their memo to us as being independent. Would you agree with that? Ms Ozinga: I would not agree with that, no. Q176 Colin Challen: I have looked at the evidence so far and I am just wondering whether or not you might say they were, perhaps, a "greenwash" organisation. Do not comment if you do not wish to. Mr Argent: I think there is some concern that PEFC is an industry-led, systems-based scheme rather than performance based. In terms of "greenwash", if you take one clear case study where you have PEFC endorsing the Finnish certification scheme (the FFCS), at present there are a number of concerns (which I think underlines all the concerns that we have about the other schemes which have been incorporated into the CPET assessment) that they are certifying areas where there are social conflicts and human rights abuses taking place for indigenous people; they are certifying areas where there is on-going forest being logged and that is having a detrimental impact on internationally recognised endangered species. So I think that the absence of social criteria in the assessment and the fact that these other schemes are getting the green light - are getting endorsement from the government - means that the government is sending out a clear message to procurement offices that these schemes are acceptable. We have problems with this because, essentially, for PEFC and other schemes to certify an extinction of endangered species and, also, on-going forest destruction, I think that is where the problem lies. We are concerned that these schemes are "greenwashing" logging practices which are detrimental to the environment. Q177 Colin Challen: Would it be your view that that has happened; the creation of PEFC as a response to environmental criticisms from NGOs, perhaps, has muddied the waters and makes it more difficult for end-users, perhaps, looking at different logos, to figure out what is right and what is wrong? Ms Richards: In terms of the way it was set up, I think there were two concerns by the industry that they were losing control over what they considered to be their territory, and that the FSC was being quite successful in terms of bringing all stakeholders together. I think it was also a cultural thing, that small forest owners in a lot of the Scandinavian countries, which have a lot of investment potential to do these kinds of things, felt that they had been short-changed by FSC because, in the beginning, when FSC was set up it was largely catering for large-scale certification. It has, since then, set in place a number of processes which allow small forest owners also to be able to participate, but in the beginning that was one of the reasons it was set up. Going back to the issue about PEFC, and this is also the case for SFI as well, you can carry a label on a timber product from forest that has been converted, so the forest conversion issue is a big thing, because you can have your forest cover and it would be converted to housing and the timber that actually comes out of that forest can still carry a PEFC or SFI label, and with FSC that is not possible because it is not allowed to convert forest. Ms Ozinga: If I can add one thing, Beatrix before sketched what happens if you are a forest owner and you want your forest to be certified under the FSC scheme. That is across the board. That will happen when you are a forest owner and you want your forest to be FSC certified. The problem with the PEFC is that very different things happen, depending where in the world you are, and that makes the PEFC a really internal-contradictory scheme, almost. If you say: "Is the PEFC a greenwash?" my answer would be: "In some countries, yes; in other countries, no." That is an intrinsic problem for a scheme which has one label and one logo. Q178 Colin Challen: Just a couple of questions to Greenpeace. You published a report critical of the Malaysian scheme, the MTCC. How far away are they from being able to prove to your satisfaction that proof of legality or sustainability for their timber is about to be assured? Mr Argent: I think issues still remain with MTCC. In terms of the work we have done in identifying the problems with MTCC, one is that there is a link missing in the chain of custody, and the chain of custody being from when the tree is felled to where it ends up on the consumer shelf. There is no link between actually when the timber is felled to the point when it is processed. From that point onwards it receives the certification. Also, proof of legality as well as sustainability. There is a region in, Sarawak, I believe it is, where the MTCC has certified an area where there is still a conflict taking place, where logging is taking place illegally, and it is against the indigenous people who have land ownerships of this area. So it is already a clear case of breach of legality but it is also of sustainability as well. I think because the MTCC also certifies on a state by state case, for example for the Malaysian Peninsula as well, then it is very difficult to see how that can actually approach or identify and assess the sustainability in a particular forest concession. I know that the MTCC has gone away and given the government's assessment and conclusions to this point now, but how far away it is difficult to say, but as it stands at the moment they are a long way off from legality and sustainability as far as we are concerned. Q179 Colin Challen: Moving to Finland, there are issues which you have raised and concerns about the PEFC's approval of the Finnish national certification scheme. What are the issues surrounding that? Mr Argent: Sorry? Q180 Colin Challen: The Saami Council and the dispute that is ongoing? Ms Ozinga: I think the main problem with almost all the certification schemes, particularly the MTCC and also particularly the PEFC, is their lack of recognition of indigenous rights. In Malaysia and Sarawak, as Nathan has said, but also in Peninsula Malaysia there are legal conflicts going on; in Sarawak there are more than 100 court cases going on about who owns the land on which this forest is, but the forest is being logged nonetheless. There are very similar cases in Finland where the Saami people are in dispute with the government, saying, "This was our land; we have never given you the consent to log this land," and the government disputes this. At the moment it has gone to the European Court of Human Rights, so it is going to be a European court case shortly. The same is happening actually in Sweden. Particularly in tropical countries you see that this is actually the most significant issue and the discussion always is, "Whose land is this? Who has the right to give anybody allowance to log this land?" In most countries the government has assumed that right, often by dictatorships like in Indonesia and Malaysia, or the local people have always maintained, "No, we have never given that right away and it is our land." The whole debate is about native customary rights versus forestry legislation, which is a conflict in most countries in the tropics but also in Finland. Q181 Mr Ainsworth: Mr Lee, in your opening remarks you touched on the FLEGT process, which you said was desperately weak and disappointing. Can you very quickly take us through what has happened to end up with something that you regard as "desperately weak and disappointing"? Mr Lee: Yes. There are a series of tests that we would apply, upon which we think it is failing at the moment, and Nathan would probably want to speak about it. Mr Argent: Sorry, could you repeat the question? Q182 Mr Ainsworth: On FLEGT the process of watering down. What exactly has happened to get us to where you are so disappointed with what we have? Mr Argent: The process from where we started, when we had a very strong actual plan, to where we are now, I can only assume over the two-year period that various interested parties have managed to diffuse some of the wording and make it weaker, certainly in our view. There are a number of key points which we could expand right across the Panel where we feel that FLEGT does not go far enough. One that was highlighted very well by a Greenpeace report, which we looked at a couple of weeks back, was the fact that the Voluntary Partnership Agreements between consumer and producer countries only covered the direct trade to Europe between, say, the UK and Indonesia or the UK and Ghana and it did not cover timber products which had been imported by a third country, such as China. Again, these partnership agreements only apply to countries that are in these agreements and there are concerns that it could possibly lead to the entrenchment of environmentally and socially destructive forest practices. We have a country that is very eager to demand timber in the European Union and would just take the blanket action to legalise all forest practices in a particular country, which, again would have various impacts for that particular forest area. Ms Richards: To come in, in terms of the actual process that has been happening in the EU, yes, the initial action plan was very promising; it said all the right things and it had aims to tackle financial institutions, and it told all the countries to go away and look at their national legislation to see what they could do. It mentioned developing research on possible feasibility of additional legislation to outlaw the import of illegal timber, and its key cornerstone was this licensing regulation, which would enable countries to enter into bilateral agreements with each other and tackle some of the forest governance issues, and these all seemed to be very promising. But obviously when you look at what has to happen on the ground in terms of that, in your licensing regulation you need to also have some kind of terms for reference for those countries in terms of entering into the bilateral agreements - they have to be credible. Unfortunately with the licensing regulation, as it is currently proposed, we were absolutely amazed to see some of the things that have been taken out of it. They have taken out full product coverage, so the agreements that the two countries are going to agree - let us say the UK and Indonesia - will only cover sawn wood, plywood and roundwood, and it will not cover things like pulp and paper, and we all know that the pulp and paper industry has a huge role to play in the illegal timber supplies - I think it accounts for about a quarter of the trade coming into the EU that is illegal. Then also the licensing regulation also does not take into account the fact that the timber goes via third countries, so it means that your guy on the ground in Indonesia will send his timber off to Malaysia or to China and then it gets converted and it comes into the UK that way. It also does not take into account the fact that you cannot verify what is happening on the ground because they are not making independent monitoring and third party verification mandatory. Independent monitoring is just somebody being able to check what is happening on the ground: whether it is legal, how that is operating, how the country is implementing the legal compliance; and those are the problems with that process. We are suggesting that in order to fill the gaps now the only option is to develop this additional legislation and to make it a crime to import illegal timber into the EU. Q183 Mr Ainsworth: Why do you not think that we have that anyway? Ms Richards: It is not a crime to import illegal timber into the EU. Q184 Mr Ainsworth: Why do you think that that solution has not already been arrived at, instead of which we are going through this complicated process of licensing and Voluntary Partnership Agreements and all this sort of thing? Mr Sauven: You mean why has the UK Government not taken that decision? Q185 Mr Ainsworth: Yes. Why do you think that it is not already illegal to import the stuff into the United Kingdom? Mr Sauven: We talked to Elliott Morley about this two weeks ago and he said, "I am not into gesture politics," which meant, "If I act independently and unilaterally without the EU that is just making an empty gesture," in terms of the fact that he thought it would just go in through other European countries and then would be imported here anyway. Our response to that was twofold, and in fact we have legal advice from a QC who says not only that the UK under EU legislation could enact its own national legislation - and there are other countries like Germany looking at that possibility - but also we could act on timber that was coming into other EU countries and then being imported into the UK. I do not see it really as gesture politics anyway, I actually see the UK Government taking responsibility and acting tough on this issue and sending a clear message, and also appealing to other partner countries in the EU to actually join it, because if one looks at it most of this timber is coming into the UK anyway, into Tilbury, Liverpool, Felixstowe and so on, and then it is coming into Rotterdam in the Netherlands, and some of it is coming into Hamburg. So in fact we could have a huge effect, a disproportionate effect just because of the amount of timber coming into the UK and one or two other countries. So I think that the UK government did act it would actually send out a very, very powerful message, and I think it would be very loud and very clearly felt, not only by producer countries but by the EU partners as well. Ms Richards: I just want to come back in on that. It is about cheap supply; the demand is for cheap timber, and that is what is driving it, and the UK is as much a culprit as anybody else in that. Therefore that is why nothing has happened, because it has been too convenient for our markets to get in cheap timber. I think that is one of the key reasons, and it is far too easy; it is a wild stock. There are some parallels that you can draw with the fishing industry. Q186 Mr Ainsworth: Going back to the previous questions, do you know at whose behest all these changes were made in the various drafts of the licensing agreements that you went through before? Is it retailers? Ms Richards: You mean in terms of the actual structure of the licensing regulation itself? Q187 Mr Ainsworth: At the EU level. Ms Richards: Member States have requested, and there are some countries that have been dragging their heels very clearly on this, and they are obviously being lobbied by their own industry sectors, and interested groups in their own countries. So that is what has happened. There have probably been about five key countries that have been driving the process and have wanted various good things in there and then the rest have been dragging their heels; and then there is also a certain proportion of countries involved that just have not had an interest, they are not politically motivated to do something about it. Q188 Chairman: This meeting last week was under the presidency of the UK Government, was it not? Ms Richards: Yes. Mr Lee: I think there are parallels with the whole process on things like chemical regulation, for instance, where there is no question that action through the EU would be the most powerful and effective way of tackling this problem because it is one of the key three trading blocks in terms of timber and forest products, and getting agreement is obviously difficult and controversial. But doing something strong and robust both with the licensing and the control of illegal imports, at a European level, would be an incredibly powerful driver for market innovation. It would provide a level playing field for the companies that are trying to operate responsibly; and it will lend extra credibility to the certification schemes that are currently robust. It is desperately needed. Q189 Mr Ainsworth: Which countries are dragging their feet? Ms Ozinga: We are not supposed to know this but there are definitely a few Scandinavian countries that have not been very supportive in this process. Another answer to your question, "Why has this not happened yet?" it is also because there is no multilateral agreement among countries - there is certainly no multilateral forest agreement anyway, but certainly not about illegal logging. There is about paintings and art and things being stolen. On the one hand that is a reason not to do anything, and of course for countries that do not want to do anything that is a very good argument which they will use again and again. So you will have to get beyond that actually by starting a process which might in the end, or might not, lead to any multilateral agreement. But there is a tremendous fear among all EU Member States, including the UK, I would say, to actually demand things from importing countries, like they would licence all their exports, for instance, and not just the export to the EU. Because one of the problems that Beatrix highlighted is that with the current licensing scheme you can have an agreement with Malaysia or Indonesia but if you do not have one with China you will still get all the Malaysian and Indonesian timber via China. The very easy way around that is to demand from Indonesia and Malaysia that they licence all their export and not just that to the EU. That would go a long way to addressing this problem. But there was no political will from any of the countries to demand that in the partnership agreements because they feel that it is forcing what we want on to those countries, no matter to the fact that it is the local people who would benefit most from those sorts of measures. Q190 Mr Ainsworth: Can we just stick with China because we had evidence last week from the Timber Trade Federation and discussed the Greenpeace report, which has been highly critical of imports of timber via China? The Timber Trade people told us that this plywood is 94-96 per cent poplar core, which is perfectly legally harvested in China and that there may just be some veneer on the surface, which is potentially illegal. Is that your understanding of the situation? Mr Sauven: It is an interesting way of putting it. The problem is, yes, if there was just one plywood mill in China and it was poplar core - it is not all poplar core, some of it is hardwood but then you put a tropical hardwood veneer on the top and the bottom of it - and if there was just one mill, that would be fine. The problem is that in the one region where we visited where this report was based there were 9000 mills. So the extent of this is absolutely massive. China has come from being quite a small producer of plywood to now being the world's number one exporter of plywood; it is now a massive industry. According to the ITTO about five out of every ten rainforest logs are going into China. So it is not just for plywood it is also for floorings, for furniture. The same week that we produced our report Global Witness produced a report about all the illegal timber going in from Burma's rainforest, and the extent of that was just unbelievable, the amount of timber pouring over the border from Burma and just being waved through by the Chinese Army, by the customs officials and so on and so forth. So, without doubt, there is a massive laundering exercise going on there. I think that what was also quite clear is that the timber trade here did not have a clue from where this plywood was originating because in fact we went and bought some plywood which we actually delivered to our environment colleagues here a couple of weeks ago, and we asked for evidence --- Q191 Mr Ainsworth: I know that somebody was trying to get into the building at the time! Mr Sauven: They could go round the back door, which was actually the front door! The thing is that we asked for a certificate of legality and we were sent some paperwork - they did not know it was Greenpeace - and that paperwork, according to the species on the paperwork, said that it came from Gabon, from Africa's rainforest, and in fact we bought in Tanga, which had actually come from Papua New Guinea's rainforest. So even the species was wrong, the continent was wrong and wrong rainforest. The only thing that showed the origin of it was the fact that it came from China, but of course we were not interested in the fact that it came from a mill in China, we wanted to know where the tropical hardwood veneer had come from. Of course, when it came to that they did not know. Q192 Mr Ainsworth: Is there any way of finding out? Is not the problem so huge - and you have described it graphically and it is awful - that it is impossible? Mr Sauven: No, because that is the whole point of having a certification system. If you have a chain of custody you know exactly where it is from; FSC will tell you which tree stump it came from. That is the whole point of having certification, being able to have proof of legality. Then of course we would say not just legality but also sustainability. So if you have a system in place and a robust system in place it is actually very easy to do it. The thing is that the timber trade here, more or less all of it, has promised that they would only sell legal and sustainable timber, and that is the thing that we get really angry with the Timber Trade Federation about because they should be dealing with their members. They have signed up to all these agreements within the Federation and they should kick them out if they are not going to abide by them. We cannot be in a situation where we are telling Indonesia and we are telling Brazil and all these other countries, "Get FSC certification, clean up your act, get legality and sustainability and then we will buy your products," and they do all this, go to all this expense, and then their products remain unsold because they are being undercut by illegal timber. It is a nonsense and it is grossly unfair on those countries as well. Q193 Mr Ainsworth: Can I ask Ms Richards about the 95+ Group, which you set up in 1991, which is now the Forest Trade Network, which you referred to earlier? Do you regard this as having been a success? Ms Richards: Yes, we do. At the moment, to give you some figures, as of May 2005 there is now a Global Forest and Trade Network. Originally it was set up in the UK in 1991 but it is now global, and the membership consists of 22 producers, which is a new direction that the group has taken, in that we are also tackling not just buyers' groups any more, but also producer groups as well. And we have 365 buyers as well within our groups, which is driving FSC certified forest now, delivering about 12.9 hectares, and globally there is 65 million hectares of FSC certified forest. So we are delivering a good proportion of that through the GFTN. At the moment we have 31 applicant companies, which will be managing an additional 4.3 million hectares. So it has had a very positive impact and is an example of the fact that there are certain parts of the industry that are more than willing to join and are highly motivated to do so. So that is an important point to make when we talk about the timber industry. It is a very disparate group of individual companies; some are very good and some are extremely bad. Q194 Mr Ainsworth: Some of your members seem to have a habit of getting into trouble with Greenpeace. Ms Richards: This is where we go back to the step-wise approach and the fact that the chain of supply is complicated. We have confidence that the companies that are members of the FTN, especially now that we have new, very stringent rules in place for their membership, obviously have a pretty complicated chain of supply that they need to be able to counter, and not all of them are FSC certified yet. There are some in there that are committed to getting FSC certified, but at the moment they are only being able to look at to get known origin of their timber supply, so to know where it comes from, and then work up to be of legality and up to certification. So you will have some companies in there that are not 100 per cent. Q195 Mr Ainsworth: So when Wyevale or Argos or Homebase receive the attention of our friends from Greenpeace it is not their fault? Mr Sauven: Wyevale cleaned up their act. That is a positive thing. Ms Richards: I would say that in a number of cases it may well be that there are some exceptions to that, that it is not deliberate - I would not say it is not their fault, it certainly is their fault, but it is not deliberate - and when these things have happened in those cases these companies have actually taken corrective measures to try to tackle the issues. Q196 Mr Ainsworth: You have improved the scrutiny of the way the scheme works have you not, which I think was criticised as a lack of transparency? Ms Richards: Yes, especially in the early stages when it was set up the policing structures were not as tight as they should have been, and that has definitely been improved. In terms of the UK Forest and Trade Network, we now have a whole set of criteria for engaging with companies, which they have to follow and they have an annual reporting requirement. Mr Lee: Which are designed to ensure that they really are on the pathway that they are talking about and, also, if they are not we are prepared to throw them out, as has happened over the last couple of years. Q197 Mr Ainsworth: You have thrown some out? Ms Richards: Yes, we have; I think we have thrown out three now. Chairman: On that point I think that taking responsibility for what happens is a really important aspect of this and we are very grateful to you for the time you have given in coming along this afternoon. Memorandum submitted by Chatham House Examination of Witnesses
Witnesses: Mr Duncan Brack, Associate Fellow, Environment and Development Programme, Royal Institute of International Affairs (Chatham House), Ms Jade Saunders, Associate Fellow, Environment and Development Programme, Royal Institute of International Affairs (Chatham House) and Ms Emily Fripp, Consultant, Royal Institute of International Affairs (Chatham House), examined. Q198 Chairman: Good afternoon. Welcome to Mr Brack, Ms Saunders and Ms Fripp. You have heard some of the earlier part of our session this afternoon, so we will plough on very quickly. Thank you very much indeed for coming along and giving evidence to us this afternoon. By way of introduction, could you give me some background as too why Chatham House is making this such an important issue? We have heard earlier on that there is perhaps lack of leadership in various other places. Why is this so important that you should put so much effort at Chatham House into working on this whole issue? Mr Brack: Thank you for the opportunity to talk to you. I should emphasise at the beginning - and you may well know - that at Chatham House we very strictly are not an advocacy organisation; we do not have a corporate view on any issue. So our individual researchers express views of their own, but they are not corporate. Having said that, I suspect that all three of us agree with each other on this. We came at this issue five or six years ago from a background of working on trade and environment issues - inter-relationship between WTO and environmental issues - on international environmental crime, for example on wildlife, ozone depleting substances or fish, and more generally on environmental regimes and environmental governance. Most of the work we have done on that since has been funded by the UK Government, and I think they saw us - as we like to think of ourselves - as a place with convening power. We are a neutral organisation, people trust us to run meetings and events where we are not trying to put over a view, and we give space to actors from across the spectrum to express their own views. One of the things we do is to run a whole series of consultation and update meetings that have really developed into a focus for the debate on this - in Europe, at least. And we run a website with up to date information on everything that is happening. In addition to that, we are an independent research organisation and we have done a lot of the work that I think has helped to back up things that have happened in the EU and amongst the UK, particularly on ways of controlling imports of illegal timber because that relates to our previous work on trade environment and environmental crime. It is around the licensing system and around procurement and so on. So certainly the work has developed much more than we thought it would do to start with, but I think that is a reflection of the effort and the focus that the UK Government in particular has put into this issue over the last five or six years, really actually since 1998 when it was the Chair of the G8 and created the G8 Action Programme in Forests. Q199 Chairman: Thank you. In terms of the stakeholder meetings that you have been having, which I understand are funded by Dfid, arising out of the discussions that you have had with them, is there a meeting of minds with the retailers, the producers, with the NGOs? Also, in respect of Dfid's interests as well. I am thinking particularly about the Commission for Africa. Is there a meeting of minds about how this should all be taken forward that you have come to understand? Or is the gap larger than ever? Mr Brack: If you go back to where we started five years ago people were only just beginning to think about this, and I think as Saskia said in the earlier session the whole issue has grown in political profile quite rapidly over the last five or six years. Certainly there are wide differences of opinion and you saw that in the last session. What we are about is giving everybody an opportunity to debate with each other and to have dialogue with each other, and our participants in our meetings are drawn from governments from all over the world, from international organisations, from NGOs and from industry. So I think that probably people would accept that they have been a useful forum for debate. I am sure that there will continue to be differences of opinion over the policy options, and that is a very healthy thing. I think it is useful to have NGOs always criticising government and driving them in the right direction, and industry as well. What we aim to do is to provide the platform for that kind of debate to happen. Ms Saunders: Could I just add briefly, that although, as Duncan said, there is not necessarily consensus on the solution there is a growing consensus on the fact that it is a problem, and I think that is one of the things that we have seen recently, that the UK trade have, from a few years ago - and Emily has worked with the trade more than I have - they were at a point where there was a lot of, "It is not us, Guv, talk to the bad guys, we are the more high street names," and things, to a recognition that all consumers have a part to play in solving these problems and recognising them. I think a consensus around the fact that it is a problem that needs to be addressed has emerged, and I think emerged out of Chatham House meetings to an extent. Ms Fripp: Something that one of the traders said to me recently was, "Five years ago you would have never even sat around a table with NGOs and talked about stuff, let alone let them ask you, 'Can you prove that what you are selling in B & Q or wherever, in whichever shop, is actually legal?'" And they do have some form of dialogue - whether it goes anywhere and what it results in - and I think that is a huge step forward compared to five years ago. Q200 Chairman: So if we can move on to timber procurement
and compare with what has happened here in the UK with CPET, with other
European countries? How do you think we
fare in relation to Germany, Netherlands, France and Denmark, to what they are
doing? Q201 Chairman: But there has been some criticism from NGOs of CPET, has there not? Mr Brack: Yes. Q202 Chairman: Is that justified? Mr Brack: On the certification schemes and the extent to which it has judged those, I would like to hand that over to Emily, who has worked on this more than I have. Ms Fripp: I am not a certification expert, but the bit that I know about, from the assessment side it is reported that the initial assessment, PFC and SFI, did fail on the big criteria that Saskia was mentioning beforehand - PFC on the unbalanced approach to standard setting and SFI on its audit systems. Both schemes responded within a three or four-month period and got back and tried to change and address the criticisms that were given by CPET. Whether they addressed them to the level that perhaps NGOs would like, I do not know; and I am not in a position to judge. But I think considering that there has been debate and pressure on those key issues for a number of years by NGOs to the certification scheme, and the fact that CPET manage to get change within a period of months - be it whether it is enough, and the process there is for continual review - I think that is a significant impact of CPET moving forward. Mr Brack: Could I add briefly that the principle of CPET is an important thing, which other countries do not seem to have? You have to have some way of both assessing existing certification schemes but also allowing companies that are not certified at all to prove that they are meeting the same standards. There is an important element of WTO and the EU procurement rules, and therefore I think it is a very logical response to set up a body like CPET, and that possibly ought to be developed EU-wide in the long-term. Q203 Chairman: What would you say would be CPET's ten greatest achievements to date? Mr Brack: It is too soon to tell. Q204 Chairman: Their two greatest achievements to date? Mr Brack: In coming into existence. In assessing the certification schemes, I think you can certainly make criticisms of that and that is worth looking at. But in setting up a mechanism to assess alternative forms of documentation for people who are not certified, which, as I said, is an important part of any procurement rules. Q205 Chairman: You were saying earlier on about the five different European schemes where you had a fear that they were moving to an unlevel playing field in respect of timber procurement. I am moving on to the WTO rules, and I am keen to question you, Mr Brack, about how you could see a sustainable timber procurement policy being compatible with WTO rules. I have read with interest the evidence you have given to us. Are you actually saying to us that if the government wanted to, if the UK wanted to, if it took the leadership role within the EU, that there would be nothing to stop the EU within the WTO coming up with just such a policy in respect of procurement? Mr Brack: Yes, I think so. I do not think that WTO rules are very important constraints on the EU Member States, partly because the WTO agreement on government procurement has been signed by relatively few States and by no important tropical timber exporting companies, but largely because the EU procurement rules are far more detailed. They build on the same principles as the WTO procurement agreement anyway, but they are much more important constraints for the UK and other Member States. But I think that they give enough latitude to allow Member States to impose quite tough standards for sustainability. I think more of constraint is the lack of availability of sustainable timber in the market place. So I think again that the UK and others are right to say, "We will make sure that legal timber is the basic requirement, but above that we will go for sustainable timber where it is available." The big debate I think is about the extent to which you can incorporate social standards, for example the treatment of forest dependent people, indigenous communities within your procurement policy. It is clear that there is substantial disagreement here. The UK has interpreted so far the EU procurement directives as not allowing that. Other countries appear to interpret them as allowing that. I think it is a substantial area of uncertainty. Partly we have no idea because there has never been a disputed case on this before the European Court of Justice following from the new EU procurement directives. So the interpretation is unclear and it would be useful to have further discussion about that. Q206 Chairman: I am not altogether clear. Are you saying that if the UK government wished to proceed with getting approval through all the different layers of bureaucracy that it would have to go through, if it set out to achieve a sustainable timber policy of procurement that it could actually do that? Or are you not including this issue of social alongside economic and environmental in the definition of sustainable? Mr Brack: Yes, that is the problem. The Member States can broadly do whatever they like, but if someone thinks that they are exceeding the constraints set by EU procurement rules they would launch a dispute against them and the European Court of Justice would hear it. So to that extent we are not completely clear how the ECJ would interpret procurement directives. I think there is not much disagreement that you can impose quite high environmental standards, so the environmental angle of sustainability is not likely to cause a problem. The area of dispute is about the social element of sustainability. Q207 Chairman: Are you saying that that could be included as well? Mr Brack: I am saying that it is unclear whether it can be included. I do not know, personally. But clearly different Member States are interpreting this in different ways. Q208 Chairman: In terms of the contact that you have had with other European countries, what do you know about the stance of the UK government on this? Are they sympathetic to try to overcome the problems that there are in this definition of social, or do you think that there would be sufficient support to proceed and, if necessary, take whatever action needs to be taken through the WTO to get that on to the WTO agreement level? Mr Brack: Again, it is an EU procurement directive problem and not a WTO one. I honestly do not know; I am not sure that I could say. I think that there is sympathy within the UK Government for incorporating stronger social criteria, but they feel constrained by EU procurement directives. Other Member States do not appear to feel as constrained as the UK. So it would be helpful to discuss this further and perhaps get a legal interpretation of the procurement directives. Q209 Chairman: So I am right that the answers you have just given now are slightly at odds with the written submission you have given to us, that really if there was a will to do it there would be a way of doing it? Mr Brack: I think my written submission just said it was unclear, which it is unclear. Q210 Mr Ainsworth: We have not had much evidence yet which gives us confidence that the FLEGT Action Plan and the Voluntary Partnership Agreements are going to amount to a row of beans in terms of making a practical difference. Is that your view? Mr Brack: No, I do not agree with that. I think a lot of the criticisms that the NGOs made in the previous talk are to some extent justified, but I think you need to see the licensing scheme that the FLEGT Action Plan is bringing in. That is the first step in a series of further steps, and in that sense it should be compared to any environment agreements, where the initial agreement was clearly inadequate to deal with the problem but it creates a step beyond which you can take further steps. For example, the Montreal Protocol on ozone depleting substances, the Kyoto Protocol on climate change. Clearly their first versions were inadequate to deal with the problem, but they create the systems and the will to move beyond that in due course. So I think if the licensing scheme stopped at where it is likely to be in the first year or so, and did not proceed any further, it would not be terribly effective. But I do not think that is necessarily the case, I think it can develop and evolve. The problem is, as Saskia said in the earlier session, there is no multilateral agreement on forestry or on illegal logging under which you can bring in a licensing scheme, and other licensing schemes, again for example in the Montreal Protocol or on the Kimberley Process on conflict diamonds, have taken place within multilateral frameworks and have worked effectively to exclude illegal products, or, for the Kimberley Process, conflict diamonds for world markets. I think they have a good record and they can work. But because there is no multilateral agreement you can meet that problem in two ways: one is to try to negotiate a new multilateral agreement and really there is not much political will, since the collapse of the attempts to negotiate the Forest Convention at the Earth Summit 15 years ago, for a new multilateral agreement. Or you can choose to do what the EU is trying to do, which is to build up the system from the bottom up, through bilateral agreements with individual countries. If you do that then you face the inevitable problem that there will be some countries that probably will not join your bilateral agreements and therefore potentially provide gaps, loopholes, through which illegal timber can be imported. It is true to say also that a processing country causes potentially quite a big gap. If the agreement, for example, is between Ghana and the EU, where Ghana is quite likely a first signatory and Ghana exports primarily straight to the EU without any intermediate country, then I think the licensing system, in those circumstances, ought to work well, as long as it has the things like independent monitoring built into it, which I think will be there in the partnership agreement. If you are seeing a longer chain of movements, if a country like Indonesia exports to China and then China exports to the EU, then that makes the system, as it is envisaged at the moment, much more difficult, but I think that is something that needs to be tackled and we need to think how you can deal with chains of countries exporting and shipping. In theory, conceptually, there ought not to be a problem with developing that; it needs more political will, it needs more effort, it needs a willingness to move beyond the initial system. I think that the FLEGT Action Plan, the licensing system and the partnership agreements are setting up the first stage of that process, which we then ought to move beyond. So I am much more optimistic than the NGOs. Q211 Mr Ainsworth: You certainly are and it is quite refreshing to hear somebody who is optimistic about these things. Let me explore a little further how justified that optimism is. We heard just now the way that the whole licensing system had been watered down, reduced basically, and you yourself said it is very modest, it is more emblematically important than practically. I think you said that 20 out of 25 of the EU Member States are doing nothing. With that kind of political inertia how likely is it that any of this is really going to happen soon? Mr Brack: Two comments on that. The reference to 20 out of 25 was about procurement policy, which is separate and different from the licensing scheme. I think procurement is very important and it can come into effect faster than licensing, but it is not connected; they are different things. The licensing scheme will affect the whole of the EU, which is a regulation that will apply without the need for any more national legislation. I do not agree with the comment made by WWF that it has been watered down. Actually the original text of the Action Plan referred to the licensing scheme covering a more limited number of categories of timber than has now actually proved to be the case. Because of the impact studies that the Commission carried out on the likely effect of a licensing scheme they actually extended those categories that the licensing scheme will cover to include plywood and veneer, which was not envisaged originally. So I simply think that was an inaccurate comment. I accept that again the licensing scheme will be more effective if it covers all categories of timber and timber products, including processed products, engineered wood and pulp and paper, and again that is something that they need to be prepared to move on to very rapidly. But, again, it is the first step in the process. Q212 Mr Ainsworth: You are currently looking at alternatives that the EU could adopt. Are there any promising signs there? Mr Brack: There are two elements in the action plan on which we are carrying out studies on behalf of the UK Government, and I think again I would agree with the NGOs in saying that the Action Plan has been rather slow in implementing some of these studies. The first one is an examination of national legislation in countries to see if there is any kind of law that might be relevant to control the import of illegal timber, for example laws on theft or receiving stolen goods or money laundering. We have not finished those studies yet - there are five or six going on in various Member States of the EU - but my preliminary conclusion would be that there are no domestic laws that are likely to be very useful in controlling the import of illegal timber, particularly countries that do not sign a partnership agreement. So the second stage then is to look at what the options are for additional legislation at the EU and Member State level that might be helpful to control the import of illegal timber, and again I would agree with the NGOs that this kind of legislation would be extremely useful as a reinforcement to the licensing scheme. I think there are a series of options that we will be looking at - we have not finished the study yet - and one is modelled on legislation in the United States that makes the import of illegal fish and wildlife produced illegally overseas illegal in the US. I think it should be possible to adopt something like that at EU and EU Member State level. Q213 Mr Ainsworth: Does the WTO come into the equation at some point? Mr Brack: It depends what the legislation says. The US legislation, the Lacey Act, is not a border measure, it is not a requirement that is imposed at the border - if it was then there would be WTO cases. What it simply says is that if you are found in possession of fish and wildlife produced illegally overseas or if you sell it or market it or transport it or export it, then that is an illegal act and you can be subject to prosecution in the US courts, or even if you did not know that the material was illegal you can have it confiscated from you. So it is important to say that that is not a border measure, it is a change to criminal legislation; and the German draft legislation which made the marketing and possession of timber produced illegally in tropical forests illegal in Germany - it is not implemented yet, it is still draft legislation - is an attempt to do something like that at the EU level. I think that kind of measure adopted at the EU Member State level would be a very important reinforcement for the licensing scheme. It is not a panacea because it is still quite difficult to get evidence of the fact that the timber has been produced illegally; you need to have good cooperation with the producing country and you need to have evidence of the crime there, and that is not easy by any means. But it is another kind of reinforcement, a shoring-up of the licensing scheme. Q214 Mr Ainsworth: But you also need political will within Europe. Mr Brack: You need the political will. I think it is very helpful that Germany published the draft legislation because it rather moved the debate on. I think the view amongst the EU Member State Governments and the Commission has been, "We want to see the licensing scheme come into effect first and that is the top priority," and I think they are right on that. And, "When we have that in we will look at other options as well." I think they could have been faster in looking at the other options but they are due to look at the other options. Q215 Colin Challen: Turning to the role of investment finance, particularly as it supports the destruction of forests and encourages unsustainable timber production, what sort of investment are we looking at, in both public and private senses, and what kind of figures might we be talking about? Ms Saunders: I was told yesterday that you would ask for figures and unfortunately it is the one thing that I cannot really give you. As to the kinds of investments, there is a really broad scope and it goes from everything from on the public side where there are export credits, development assistance, development banks, and on the private side equity investments, bond trading, project finance and corporate finance. They are all involved in different ways and in different sectors that are damaging or high risk at least. There is not a lot of international investment in actual forest management or logging because they are not particularly capital-intensive sectors, but there is investment in, for example, the pulp and paper sector. The extractives quite often are in forested areas so although they are not ostensibly forestry investments they still have an impact. The infrastructure and investment in road building and those kinds of things, and timber processing such as ply, are all quite critical sectors that do get international investment. Q216 Colin Challen: I understand that in China the pulp and paper mill sector is already over capacity measured against its legal sources of supply. Are we still seeing a lot of investment going into that sector? Ms Saunders: If you talk to analysts now it is still being punted as an exciting sector in which to be investing. Q217 Colin Challen: Where are those analysts based? Ms Saunders: Europe and North America. Q218 Colin Challen: British banks? Ms Saunders: I have spoken to one analyst in the UK and two in Dutch banks and they have been talking about it quite positively. I have also seen recommendations from Asian arms of European banks, Asian subsidiaries of European banks. Credit Suisse was the one I read recently. Q219 Colin Challen: Have any of these analysts become more aware of things like corporate social responsibility, those CSI issues that many companies now seem more engaged with? Ms Saunders: On paper, yes, but it is very difficult to see the impact of that in investment decisions. Banks are not particularly transparent about the decisions they make and they are certainly not transparent about the investments they decide against. I have been reading recently that there have been a few big oil palm flotations in Malaysia and in the general business Press the only risk that is mentioned is the potential fluctuation in commodity prices. No one is talking about the potential for that land to have been cleared illegally; I have not seen anything like that in the mainstream. Obviously you get it in SRI, socially responsible investment type publications, or if you talk to those kinds of banks, but I have not seen anything mainstream suggesting it. Q220 Colin Challen: Is the World Bank or the Asian Development Bank doing anything at all to try to moderate this problem, to try to pull back the enthusiasm of these analysts to pour their money wherever they see a profit? Ms Saunders: It is quite difficult to know, actually; I do not think I can really honestly answer that with any authority. They have safeguard policies but how well they are implemented is really highly political. It seems to me that there are a lot of legitimate NGO kind of concerns and then there are lots of NGOs that just do not like the World Bank, so it is very difficult. The World Bank comes out with incredibly positive glossy brochures about how great their investments are and then it is really hard to make a judgment unless you are on the ground. Mr Brack: The impression I get within the World Bank is that the country and the regional desks are far more important than the thematic desks, like the people who work on forestry, because the people who work on forestry are completely switched on to this debate but would seem to have less influence than we would probably like on the people who work with the countries and the regions. Q221 Colin Challen: The FLEGT Action Plan includes a commitment to encourage due diligence in these parts of the financial sector in forestry operations, but is any progress being made on this area as regards the Action Plan? Ms Saunders: Not in the Commission, no. This is it! The paper I wrote seems to be the only thing at the moment that is being done. The Austrian Presidency is being encouraged to hold a meeting on expert credits because there is quite a lot of evidence to suggest that export credits from Austria, Germany, Finland and Sweden go towards supporting the export of pulp and paper machinery around the world, so that is one area of impact. There are others. Mr Brack: As we said before, you can criticise the Commission for allocating insufficient resources to implement the Action Plan and, as I said before, they have chosen to concentrate on a licensing scheme, which is probably right and is probably the most important element of the Action Plan, but it does mean that other elements of the Action Plan have not had much attention paid to them. Q222 Colin Challen: On the issue that you mentioned before between the country desks and the thematic desks in the perhaps various international organisations, the World Bank and perhaps the WTO too - I do not know if they have similar separations - I am wondering, since China joined WTO three or four years ago - and I forget how long ago it was exactly - have you any knowledge of how the trade in illegal timber has developed, whether it has particularly gone up or down? And to what extent the international organisations are really taking an interest in that, or whether there are internal conflicts over the need to get China into a full membership of the WTO, as opposed to its environmental responsibilities. Mr Brack: I was actually at a meeting in China last week that was put together partly at the request of the State Forestry Agency, and we had representatives from the Ministry of Commerce and the Ministry of Foreign Affairs there, and also some NGOs from China. Partly it is an awareness raising exercise about this whole issue, what is happening within the FLEG process, the Europe and North Asia FLEG process, for which the ministerial conference will be taking place in three weeks' time, in which of course China will be participating. But they were very interested in what the EU is doing to control imports of illegal timber, and I think the impact of Wolesey Building Centre stopping imports of Chinese plywood in response to the Greenpeace report certainly had an impact on them, so they are becoming aware slowly of the interest amongst importing countries in controlling and knowing more about their imports and being concerned about trying to keep illegal timber out of their markets. What I think they are not completely aware of yet is the need to have better evidence from the countries of origin from where they are importing. China has developed as an importer incredibly rapidly and is climbing very rapidly up the import tables - far more important than they were even five or six years ago from our point of view - but they are still prone to say, "We are importing from Papua New Guinea, okay, we asked the customs officials in Papua whether the material was okay and they said yes, it was," and that is the end of it. They have not really made the switch to say, "We need extra proof because you cannot trust the people in countries like Papua." Ms Fripp: Just to add to that, the structure of the Chinese industry as well, it is huge and there are thousands of these smaller plywood producers and loggers and they themselves were undercutting. There are three or four very big producers in China and I recently met with some of them and they were complaining about undercutting in the international markets by their own producers because the thousands of the small guys getting it from Burma and elsewhere and producing a mixture of plywood, some pure tropical, some combi-plywood, and the anti-dumping regulation from the EU they felt particularly unfair because it was targeted at China, but they felt it was more at this half of Chinese production that they could not implement. And the guys we spoke to said, as Duncan said, that if one of the UK buyers said to them, "Give us evidence," they would ask that question on, but they were not fully up to speed as to what it meant, what was going on. And maybe an approach with those businesses that want to maintain business and trading with Europe would be more of a business to business approach, a bit more through the Tropical Forest Trust or the WWF TFTN framework where they are linking in with buyers in Europe and then acting as a middleman and then being helped and assisted in, "What information do we need from our producers?" The Chinese are very good businessmen and if they feel that they might lose a market, or they might gain a share of the market by having that little bit of evidence, then it might well be something they would look at. For some of these big producers they have set up factories in Central Africa and around the globe and that in itself causes many issues, but looking at it objectively from a supply chain process, if they already have a good link with a particular producer - and at the moment they are allowed in a particular producing country to bypass the laws and not necessarily pay all the taxes and ship it to themselves - because they owned and managed two of ends of supply, they own the supply and they could work with a buyer, then in theory they could do something about it. So it might be that looking more at the individual cases as well might be a way that could speed up and share some lessons from the Chinese point of view. Mr Brack: I did not answer your question about the WTO. One thing that the Chinese wanted to know was why this was not being discussed at the WTO. It is true to say that the WTO Secretariat has displayed very little interest in this. Q223 Chairman: What would need to happen in order for the WTO Secretariat to take an interest in it? Mr Brack: Probably for a dispute case to arise, if some WTO member alleged that another WTO member was unfairly constraining imports because of concern about illegal timber. It is difficult to see that happening actually and the licensing system should not lead to that because it is a mutual agreement amongst importing and exporting countries. Japan has raised the issue once actually in the Committee on Trade and Environment in the WTO and it led to not a very good discussion and a very brief one. I would query whether there is much point in raising it in that kind of general way. The Committee on Trade and Environment, which is probably the logical place it would come, was set up in 1995 along with the rest of the WTO and has yet to reach a conclusion on anything. The WTO has bigger questions on its plate at the moment, for example the possible failure of the Hong Kong Ministerial in December, and they simply do not pay much attention to these, what they see as fringe issues. Also, I think you would have a discussion - in a sense all discussion is useful - amongst trade negotiators, who are not necessarily particularly familiar with these issues and tend to see everything in terms of impairments to trade and do not really understand the basic argument. So I would query whether injecting it into the WTO Committee would be of much value. Q224 Chairman: We will take one last quick point on that. Ms Saunders: This might seem like a slight tangent but it seemed to me that in your question originally there was an element of saying, on the political trade-off between China into these international institutions and influencing them, where does the balance lie? I have to say that everything I have read about the World Bank and the Asian Development Bank suggests that the balance lies on bringing them in. Arguably safeguard policies have been changed in the last couple of years, so once they bed in and get implemented you might have more of a sense that there is more leverage, but I have not seen any evidence. The World Bank want to be involved with growth, they need to get people repaying loans, that is where their basic capital comes from. In terms of leverage it is quite difficult to see how much leverage they have. I do not know how much they have but how much they exercise does not seem to be particularly strong. Q225 Chairman: Finally, on that point do you think there would be any mileage in our Committee inviting the regional desk, presumably for South-East Asia, to give some evidence to us on this issue, given what you have both said? Ms Saunders: The regional desk of the World Bank? Q226 Chairman: Yes. Ms Saunders: I think it would be really interesting. I think it would also be interesting to perhaps get some of the relevant sectoral representatives. So if you had, for example, the Asia regional people and somebody from the agribusiness sector and somebody from the extractives. I do not know if you know about the extractives industries' review, but it was a review within the World Bank - and I have seen a leaked version of the first report - and it actually came to some substantial recommendations, or its analysis was quite critical of the impacts of extractives investments by the World Bank. A similar process on forestry and related sectors would be a really powerful tool, I think, if you could get them to talk together. They might even talk to each other over a coffee! Chairman: We will have to leave it there. Thank you very much indeed to all three of you for coming along this afternoon.
Memorandum submitted by PEFC Examination of Witnesses
Witnesses: Mr Mike Clark, Chairman PEFC, Mr Martin Gale, Board Member, PEFC UK Limited, and Mr Ben Gunneberg, Secretary General, PEFC International, examined. Q227 Chairman: Mr Clark, Mr Gunneberg and Mr Gale, welcome. I am pleased that you were able to sit in for the earlier session that we have already had. I just want to ask you from the very outset if you could just tell us a little bit about your work, how you came together as an organisation and to summarise for us how you function? Mr Clark: I am Mike Clark. Martin is ready to do that, but I thought if I just say who we are so that you have some feel for the sort of answers you are going to get from us. Q228 Chairman: By all means. Mr Clark: Martin Gale is a UK Forestry Commissioner and is also Vice President for International Forestry, for the International UPM-Kymmene Organisation. Ben Gunneberg is the Secretary General of the PEFC Council, based in Luxembourg. I, Mike Clark, am the Vice President in the consumer packaging division of M-real Corporation, another international paper based group. Martin, I think you would like to comment on the question. Mr Gale: Yes, thank you very much, Chairman. Just before going into the very brief history of PEFC I would like to set that history against the context of world fibre trade. If you take the total amount of trees that are harvested in the world annually 50 per cent of them are cut for fuel wood and clearance purposes, which includes the destruction of tropical forests for agro-crops such as Soya and also palm oil, which is an increasing problem of great concern to everybody - industry and the NGOs. That is, 50 per cent of the trees felled today will never be certified. Of the other 50 per cent, that is fibre, trees going to an industrial end use - someone is making a conscious effort to fell the tree because it is being purchased in order to turn it into a product - currently 20 per cent of that, so ten per cent of all trees felled, are covered by one certification scheme or another. So I think it is important, when we start considering the legal timber and sustainable forest management that we look at what is at the moment a very poor performance by all concerned in terms of pushing forward credible, certified timber. PEFC came about in 1999 and came about primarily as an initiative driven by the small forest owner. The dynamics of forest ownership throughout the world vary; for example in this country 50 per cent of UK forests are owned by the government and 50 per cent are owned by private owners. That is not a similar pattern throughout the world. There are currently some 15 million forest owners within the European sphere who own less than five hectares each, and it is a flow of income for them at some point during the cycle of growing trees. They felt, in 1999, that their particular interests were not well represented within this growing demand for credible certified products, and through a number of measures PEFC was born and very much focused on what is pertinent and relevant to the national requirements of the various countries that were interested. So PEFC is an umbrella scheme which takes into account the independent national forest certification schemes and brings them under this umbrella process. So it is very much in the interests of the small forest owner and is very much in focus on the affordable cost of certification for these particular types of forest owners. It is very easy for large corporations or large state owned forests to deliver forest certification at a stroke of a pen; it is very much more difficult for the small forest owner, and many companies have now organised - and the company that I work for primarily - group certification schemes that allow the small forest owners to be involved in the certification process. So I think it has been created as a result of those particular drivers. Q229
Chairman: It is interesting because I read an article that was in ENDS which
said that your organisation had come about because of the high profile that
NGOs had, but you are saying that it was not anything to do with that, it was
really the way small owners wanted to come together? Q230 Chairman: So what does your label actually guarantee to customers? Mr Gunneberg: The PEFC scheme is a scheme which is based on the inter-government processes which define sustainable forest management, collection of national laws and a multi-stakeholder input into the definition of what a sustainable forest management standard is. Therefore, when you have all those particular elements brought together you are then assessed against an international set of criteria, and the PEFC Council, for example, has 244 requirements which each certification scheme must meet. So the label provides an assurance of a consistent approach towards certification, bearing in mind the diversity of the different types of forest, the diversity of the political, geographical, biological, geological and all the other aspects which determine the different types of forest for ownership, and so on. It delivers a consistent approach to saying that these forests are sustainably managed and meet the same rigorous requirements and/or deliver those rigorous requirements. Q231 Chairman: But I am not quite clear what you do that is different from what FSC does, or what FSC does that you do not do? Mr Clark: I think Martin made the point earlier, we see ourselves as complementary schemes. We come at it from different directions. PEFC is essentially a mutual recognition type of organisation; in other words, we assess different national schemes against the 200 and however many criteria that we have, and we ensure that those schemes all meet those objectives. But they are separate schemes and we are providing a system of mutual recognition. FSC differs from us in that sense in that it has a single scheme, set of criteria, and judges everything against that one set, whereas we are looking at separate national schemes. Q232 Chairman: Mr Gale? Mr Gale: I would just like to illustrate that with two practical illustrations. The company that I work for operates globally. We have forests in Scandinavia and we have plantations in the UK and increasingly in Uruguay. We choose as a company PEFC in Scandinavia and FCS where we are creating plantations. The reason we make that choice is because where you have a significant change of land use, i.e. you are going from agriculture to industrial plantation, then FSC's social aspects are much more pertinent in those national circumstances because we are very much interested and want to take account of the social points of view, the social impacts in a major land use change. Where you have the history of forestry that has been in place for centuries and has been managed actively for centuries within a community environment, those social aspects are not as important as some of the more technical aspects. So it is back to this choice, that PEFC is a preferred scheme where certain national circumstances dictate it and FSC is a preferred scheme for similar reasons. Q233 Chairman: Basically what you are saying is that there are not the same minimal standards across countries because you can pick and choose whether or not you take into account the social aspect in respect of the sustainable definition? Mr Gale: There is a basic common denominator of standards. The FSC process does allow us. For example, in Uruguay we are converting 250,000 hectares of ex-grazing land in Uruguay to eucalyptus plantation, as we speak, and we are halfway through that process. What we have done so far has been certified under FSC; we have just been reassessed and commended through the FSC process, and we will plant the rest of that 250,000 under FSC because the pertinent criteria are relevant to a major land use change. If you do not have a major land use change you do not need to be asking the questions that are contained within some of those social criteria. Q234 Chairman: So is there a common denominator that goes across all the different places where you operate and, if so, what is it? Mr Gale: Yes. I think the proof of that is that within the United Kingdom's National Forest Certification Standard (UKWAS), both FSC and PEFC have endorsed the UK standard. So there must be basic sets of criteria with which both organisations are happy, and indeed UKWAS is a benchmark national standard for planet earth. Q235 Chairman: Can I move on and ask how it actually works because in the earlier evidence that we heard our attention was drawn to the effectiveness of monitoring that took place. Do you just take as read what appears on the paper in front of you? I can see you expressing surprise at that, so how do you actually monitor that what you were told actually works? Mr Gunneberg: There are several levels. First of all there is standard setting, then there is certification which actually takes place to a standard, and then there is somebody to monitor that the certification bodies are competent to do their work, and that is done by an accreditation. When we talk about the monitoring, if I have understood the question correctly, the monitoring process of PEFC works in that we have 244 requirements for certification schemes which they must meet. Q236 Chairman: How do you know that they do meet that standard? Mr Gunneberg: We have a very rigorous process where we use external consultants who undertake an assessment of the certification schemes. It usually takes nine months and in the longest case it was one and a half years. It consists of a process where an independent consultant assesses the scheme, undertakes a global public consultation on the scheme, takes into consideration all the comments that are received, writes a report on all of the 244 requirements, gives their opinion on those 244 requirements and that report is then given to the members, which are all the schemes, so they make an informed choice whether the schemes meet the requirements or not, and that full report - everything - is then made publicly available on our website. So you can see that the full certification standard and the full independent audit of a national certification scheme is available on the website. Q237 Chairman: In respect of those reports, have you had any examples or any instances where you have felt that the monitoring means for the people that you have been monitoring is not up to standard, and do you have a complaints procedure that you have instigated? Mr Gunneberg: Yes, the monitoring, which I have explained to you, is at international level but of course there is a monitoring at a whole range of levels, right down to the local level which is done by the certification bodies. When we talk about the complaint procedures, the complaint procedure is made available by all who make decisions in the whole process. So, for example, the standard setting body nationally, which includes all the stakeholders, has to have a written complaints procedure; the certification bodies have to have complaints procedures; and the accreditation body has to have a complaints procedure. So there are three levels of complaints procedures which are formal. Then of course there are the informal ones which go through the consultation. All of those are guided by the ISO Guides on this particular area to ensure that we follow the same approach as any other standardisation process used for any other centre. Q238 Mr Ainsworth: Would you like to comment on the example that we heard about earlier from Austria - clipboard and a tick box? Mr Clark: You ring up and you tick a box and you are certified apparently, or something like that? Mr Gunneberg: It is not how I recognise it. Every forest owner in Austria commits themselves to the certification standard. Austria has a regional certification approach. Regional is a form of group certification but it is undertaken in geographical boundaries, to make it possible for more forest owners to become involved in the forest management of the forests in which they are involved. Very often if you have five hectares there is only a certain amount that you can do. If you are, for example, in an area which is a high area of conservation value then of course that area needs to be protected and in some areas you will be in an area where there will be more productive focus. So from a regional approach you have to meet all elements of achieving the balance of social, economic and environment. Q239 Mr Ainsworth: Are you basically saying that the evidence we heard earlier this afternoon was untrue, that it did not happen? Mr Gunneberg: I think the evidence that was provided this afternoon was incomplete; I think there may be a perception on how this particular issue works, with which I would be happy to provide you with further information as to how it actually does happen. Chairman: If you wanted to provide that we would be very happy to receive it. Mr Challen. Q240 Colin Challen: Mr Gale, earlier on you said that the PEFC is the creation of a complementary scheme which introduces choice into the market place. Can I ask you who was asking for that choice? Where does the demand come from for yet another scheme? Mr Gale: That is very interesting. The demand comes from a number of areas; the demand comes from the people that actually purchase the products. So if we take paper as an example many of the publishing and printing houses have asked for more than one certification scheme to choose from. Q241 Colin Challen: What do you think has led them to that request? Mr Gale: The commercial world does not like a monopoly. If you would like to draw a parallel, we would all not like to be told that we have to buy one particular brand of motorcar, we like a choice. Q242 Colin Challen: That is not what it is saying, though, is it? We would not set up an alternative British Standards Institute, would we? Or is that what you are advocating? Mr Gale: I am not advocating that at all. If there is demand for a second British Institute then no doubt the market would provide it. Q243 Colin Challen: They would not go out and set up an institute if they liked the certification that the original one perhaps came out with. Mr Gale: I think, with respect, the customers are a very powerful organisation and they would not wish to demand anything that was not in their interests. So clearly they have decided that they require choice in certification. The forest product industry has decided that it needs choice, and as I described the two complementary international schemes, PEFC and FCS, there is a clear need for a choice because FCS is not as relevant in some circumstances as it is in others, and so a choice is needed. The key difference here - and I go back to it - is that PEFC is an umbrella organisation which picks up on the national interests and the relevance of what is going on in different countries. FCS takes a global view and has a single blueprint for every circumstance that you face on planet earth. The choice is required because some forest products companies, some customers require something more tailor-made for a particular set of geographical circumstances or national interests than simply a global blueprint. Q244 Colin Challen: Is it really not the case that there is not enough FSC certified timber around in the world because it does not all come up to that standard, and therefore we have to have lower standards of certification to provide some kind of gloss to the supply market? Mr Gale: I challenge the definition of the higher standards. I would suggest that Scandinavia contains some of the world's finest managed forests but it does not happen currently to choose to have those forests certified by FSC. Q245 Colin Challen: So you are saying that your scheme is of the
same standards as the FSC scheme? Mr Clark: I think what we are saying is that if you were, as CPET has done, to attempt to make an assessment of what meets an acceptable judgment in sustainable forest management, then there are a number of schemes which will have different approaches but the end product, in terms of giving you, the buyer, justification of buying a sustainable product, will be equal. Q246 Colin Challen: It has been put to us that you endorsed the Finnish scheme, the FFCS, which in that case they actively endorse, it is alleged, and actually harvesting old growth forests whose ownership is disputed by the Saami indigenous people. Would you comment on that allegation? Mr Gale: The Saami issue is important and I think we were expecting a question along those lines. I think it is important to get it in context. Firstly, the ownership of the disputed forest is currently claimed by the sovereign government of Finland. That case, as we heard earlier, has been put to the European Court of Human Rights and they have elected that there is no case to answer, and it is a Finnish issue that needs to be dealt with. PEFC is working within the legal system of the Finnish state and the Finnish state at the moment says, "These are our lands and our trees and we are happy that PEFC is certifying what is going on." So I think it is not correct to put the emphasis at the feet of PEFC in terms of what is continuing to happen. PEFC is working within the legal statement of the government of Finland. I think it is also worth reflecting that the forest area, which the government owns within the disputed area, 70 per cent of that forest is under full protection, so there is no harvesting going on. Of the other 30 per cent of the forest in that area some is actually owned by the Saami people themselves and they are continuing to harvest. So it is not just a government harvest issue. I would also bring to your attention that the Saami people are only one community within that part of Lapland and that there are other communities who do not have reindeer herding as a form of income, they have forestry work as a form of income, and they are indigenous people to that part of Finland, and so where do their rights differ from the rights of the reindeer herders of that part of the world? So it is a very tricky issue and certainly not one that should be put at the feet of PEFC in terms of failure to solve the issue. I might also draw to your attention that 100,000 cubic metres a year are felled within that part of Finland against 50 million cubic metres a year felled in Finland in total. So it is a very small issue and when looking at the certification of the forest area in Finland one has to place in balance the appropriateness of a particular single issue relating to social aspects. I would also add that of the 5.7 million inhabitants in Finland, 5.699 million are very happy with the way in which Finland manages its forests and have enjoyed the free right to roam, the free access to fruit and fungi for many, many centuries. So that is another reason why the social aspects in a country like Finland are not as high on the list as the technical management of that forest resource. Mr Clark: I think it is also fair to say that that particular area of Finland, the Northern Finland Lapland has a very fragile economic sustainability and great attention has to be paid in maintaining economic sustainability in that area, and I think there is general agreement amongst a large number of people that that is best done by maintaining the present balance. Q247 Mr Ainsworth: You would probably accept that your credibility has taken a knock through your support and endorsement of this particular activity? Mr Clark: We would regret that because, as I think Martin has tried to explain, it is very difficult to lay that at the feet of the PEFC. We would agree - and as somebody who works for a Finnish company I would agree that Finnish companies have taken quite a knock in credibility, which we find the reasons very difficult to understand, but we understand the --- Q248 Mr Ainsworth: The problem is, when you have accreditation systems that begin to lose credibility they begin to lose their point, do they not? Mr Clark: This is an item of government legislation and national sovereignty; it is not something where we can go in and tell the Finnish government what decision they have to make. Q249 Mr Ainsworth: I appreciate that. I noticed that you list the Malayan Timber Certification Council as a member, the PAFC Gabon and Russia's National Voluntary Forest Certification Council as well, but apparently you do not endorse them, they are just members. How does that work? Mr Clark: We had a discussion about this not so long ago because I did not quite understand the principles either. You can join PEFC as a member. It is perhaps a bit like joining as an associate member a trade association or a professional body - chartered surveyors, or whatever it is - but you are not allowed to go and practise or to use your official title, your official letters until you have passed an exam. So what we have in PEFC is 31 members who have joined up because they have a common commitment to the idea of the concepts of sustainable forest management. Of those 31, 21 members have been endorsed and are able to use the PEFC label; the other ten are going through the examination process. We also have nine extraordinary members - it always sounds a rather strange expression to me - and they are mainly forestry bodies and things in Europe who do not actually have a product but they are associations or bodies, or whatever, and nine of those are extraordinary members. So we have 31 total members, 21 certified or endorsed, and nine extraordinary members. Q250 Mr Ainsworth: Were you disappointed by CPET'S original decision not to endorse your accreditation system for sustainable timber? Mr Clark: I think we would be very silly if we did not say we were disappointed. Q251 Mr Ainsworth: What did you have to do to get them to change
their mind? Q252 Mr Ainsworth: Yes. Mr Gale: Boot leather to trouser seat for about a fortnight and some very quick action after that. I think that CPET was a great success, is a great success because it is the closest thing we have to mutual acceptance anywhere around, and nicely complements the mutual acceptance that both FSC and PSC find in the UK national standard. There is a very good parallel there. In terms of the nitty-gritty of boot leather to trouser seat, I am not sure whether it was your trouser seat or your boot, actually? (To Mr Gunneberg) Mr Gunneberg: Yes. The PEFC Council has taken steps to change the rules and we did that in our Extraordinary General Assembly vote in April to ensure that we meet the criteria, and they were the certification criteria of making a public summary available, and also having the public consultation during the certification or taking into consideration from the public. That has now taken place and we are in the process of assessing our schemes and will be submitting a report to CPET in the near future on how the various schemes have performed. Q253 Mr Ainsworth: You have accepted the criticisms that you faced and adapted accordingly? Mr Clark: It would be very difficult for us to take the position that we approved of CPET and then did not agree with their decisions. We think it is a good process. Mr Gunneberg: Also I would like to add to that, of course it is not just a simple case of us changing the rules. First of all we had to persuade the 31 schemes that the rules should be changed in different countries and we had to persuade not just the 31 schemes but they had to go and persuade all their stakeholders, social, environmental and economic stakeholders, that the rules should be changed. Only after that could we get an Extraordinary General Assembly vote. So there was a lot of hard work undertaken to make the changes, and then of course again a lot of hard work taking place in every one of the countries to ensure that that now is in place. Then of course we have to undertake our internal audits to ensure that we meet full compliance as well. Mr Gale: Just to add to that, allowing delivery and consolidation of those changes in a world of continuing improvement, we would also like to anticipate enhancement as time moves on. So it is not, "Phew! We have got under the post just in time," but we see in the world that we work in that continuous improvement is an important aspect. Mr Clark: We were very interested to hear the comments from Chatham House about harmonisation, if I can put it that way, and certainly we had some initial concerns about the CPET process, not in terms of the criteria setting but in terms of whether this was going to be yet another sort of scheme within Europe. Therefore, we are very interested; we could actually see CPET as being a potential harmonisation model and would have no problems if the British Government were to push for this. So we do see the CPET process as being beneficial. However, we would say that whilst we totally sign up to continuous improvement - and we realise that continuous improvement is good in itself but also if circumstances changed - we do need to recognise that we need to accommodate this as we go along, and we cannot just have change every six months, change every year; we need to have a clear programme where we set out what our objectives are going to be, what CPET's objectives are going to be, to give everyone time to get there in a logical process. Because if we fragment it and break it up I think it would be a shame, and also I think that we very much look upon, hopefully, the CPET process as being an inclusive process to try to bring more people in to increase the amount, or to get up from that ten per cent of the total roundwood forests that are certified to very much higher figures. Chairman: On that point we have had a very interesting discussion and session and I would like to thank each of you for taking the trouble to come along and give evidence. Thank you very much indeed. |