Memorandum submitted by Sam Lawson, Independent
consultant On behalf of: Energy, Environment and Development Programme,
Chatham House
SUMMARY
— Given the global focus in recent
years on the problem of illegal logging, and the discussions and
activities that have resulted, an assessment of their effectiveness
would be useful. In an ideal world, one would measure the extent
of illegal logging and the volumes of illegal timber in trade.
Virtually by definition, however, this is impossible, and so proxy
indicators are needed to judge the impact of activities over time.
— Chatham House is currently engaged
in pilot-testing a set of indicators of activities, in four categories
(awareness; government policy development and implementation;
private sector policy development and implementation; levels of
illegal logging and trade) together with expert surveys of perceptions
of activity and effectiveness. The indicators are being measured
in producer, processing and consumer countries.
— Although monitoring of the indicators
is only just beginning, tentative conclusions can be drawn. Awareness
of the problem has clearly grown across the board over the last
few years, and as a result, governments, international bodies
and timber companies are spending increasing amounts of money
on tackling the problem.
— It is much harder to assess the implementation
of these new policies and commitments, or what impact they have
had. The evidence suggests that implementation is lagging behind
commitment.
— There is a clear need for some form
of regular independent monitoring of progress in the global efforts
to tackle illegal logging, particularly given the emergence of
new structures such as the FLEGT Voluntary Partnership Agreements.
We aim for Chatham House's work to be at the centre of this monitoring
process.
1. INTRODUCTION
1. Illegal logging and associated trade
has become one of the most high-profile international issues of
the new century. At the UN and other political forums, governments
have repeatedly recognised the scale and importance of the problem
and committed themselves to tackle it. With attention and commitment
has come financial support, and the last six years have seen a
burgeoning stream of studies produced, workshops held, policy
reviews carried out, and projects launched.
2. As awareness has grown, the agenda has
gradually moved from studying the nature of the problem to analysing
potential solutions and to implementing them. With the strong
mandate provided by the EU's Forest Law Enforcement, Governance
and Trade (FLEGT) Action Plan, it can be expected that the issue
will continue to be the focus of significant resources and attention
for some years to come. Yet unless a real difference can soon
be shown to have been made and that the resources committed have
not been wasted there is a chance that attention will turn elsewhere.
3. It is therefore increasingly important
to measure the response to the problem of illegal logging and
associated trade and to gauge its effectiveness. In an ideal world,
one would measure the extent of illegal logging and the volumes
of illegal timber in trade. Virtually by definition, this is impossible,
and so proxy indicators are needed to judge the impact of activities
over time.
4. As part of Chatham House's illegal logging
work programme, this process began with an initial study published
in early 2006.[74]
The paper provided an overview of the response in producer, processing
and consumer countries, within both the public and private sectors,
and proposed a list of 20 potential indicators of change against
which it might be monitored, grouped under four main headings:
awareness, government policy development and implementation, private
sector policy development and implementation, and actual levels
of illegal logging and trade.
5. A follow-up paper in 2007[75]
examined these indicators in more depth, using a sample of focus
countries to assess whether and how the indicators might be measured
objectively, in a manner which would be consistent enough to gauge
progress over time. The study also drew on experiences from other
fields. The study found that the paucity of useful data presented
a significant hurdle to the effective monitoring of the indicators,
particularly in relation to actual levels of illegal logging.
One suggested solution was for those conducting the monitoring
to commission perception surveys of relevant experts from a range
of stakeholder groups.
6. Chatham House has now brought together
an advisory group of experts in the field of forest governance
to help develop the methodology more precisely, including drafting
detailed perceptions surveys for use in producer countries and
agreeing "ideal" lists against which to measure the
policies of governments. Chatham House, assisted by partner organisations
in producer and processing countries, is now rolling out a first
pilot assessment of the indicators, in Cameroon, Indonesia, UK,
US and Viet Nam. The assessment is expected to be published early
in 2009; the experience will be used to produce a final methodology
which will be rolled out to a broader set of countries thereafter:
initially a further seven (Brazil, China, France, Ghana, Japan,
Malaysia and Netherlands) and ultimately (depending on funding)
a much wider range.
2. THE INDICATORS
7. The indicators span all the stages of
the response to the problem of illegal logging and associated
trade, including intermediate steps such as raising awareness,
and introducing and implementing new policies. The indicators
cover both the private and public sectors, and are designed to
take account of developments in producer, processing and consuming
countries. One reason for including steps towards the end goal
is that progress in these areas is often much easier to ascertain
and quantify. Caution will need to be taken with such assessments,
however, since progress with intermediate goals does not necessarily
lead to an impact in the forest.
8. There are various ways in which to measure
the direction and extent of change in a particular issue over
time, but most depend on a plentiful and regular supply of quantitative
primary data, which is often unavailable for indicators of illegal
logging. There are ways around this problem, however, and lessons
are being drawn from attempts to measure similarly difficult issues,
including the Corruption Perceptions Index produced by Transparency
International (TI), the Fraser Institute's Index of Economic Freedom
(IEF) and the illegal fishing assessment conducted for the Marine
Resources Assessment Group (MRAG). Chatham House has also looked
at the WWF "illegal logging barometer" and previous
considerations by forestry researchers of how progress might be
gauged.
9. The TI index usefully points to how quantitative
information for which there is no objective data can be gleaned
from subjective interviews via questionnaires. The MRAG assessment
shows how limited anecdotal data can be manipulated and extrapolated
using educated guesswork and proxies in order to provide estimates
of the extent of a similar problem, but such assessments are too
inaccurate to be used safely to measure change over time. The
WWF methodology shows how limited qualitative surveys can garner
useful additional information not readily available in the public
domain, and how simple scores can be attributed to this information,
though such a scoring system is subject to bias.
Awareness
10. Useful data on the level of awareness
in various countries can be gleaned from media databases. Searches
can be conducted for relevant articles in both domestic and international
media, and in local languages. These tend to show that coverage
of the subject is growing across the board, though the amount
of attention remains much lower in less sensitive countries such
as France, China and Viet Nam. Simple numbers can be misleading,
qualitative analysis of news media is necessary to put the numbers
into context. An examination of coverage in the five focal consumer
countries[76]
in 2005 reveals that in the US, for instance, where overall coverage
appears high, very few stories were published in the largest outlets,
and almost none mentioned the role of the country as a consumer.
The pilot assessment currently being carried out is collecting
both quantitative and qualitative information on media coverage
of the subject of illegal logging and associated trade, and is
also measuring awareness as part of the survey of experts.
Government policy development and implementation
11. Quantifying the development of policies
and regulations is difficult; the means currently being piloted
is a simple assessment against a set of ideal criteria. For producer
countries, such criteria include such factors as whether forest
laws recognise traditional rights, or whether concession licences
are allocated publicly by competitive tender. For consumer and
processing countries, the assessment looks at such measures as
whether procedures exist for inter-agency coordination on tackling
the problem, or whether existing legislative options for halting
imports of illegal wood have been analysed. The Chatham House
team has worked with the advisory group of experts to draw up
draft lists of ideal policies for different country types, guidance
on how they should be assessed, and methodologies for summarising
and comparing the results.
12. Assessing the extent to which regulations
are implemented and enforced is problematic. For consumer and
processing countries there is little limited basis for enforcement
against illegal timber imports and therefore very little data;
figures on the implementation of public procurement policies,
where these exist, is also limited. In producer countries, ideally
it would be possible to monitor figures for the number of illegal
logging cases, and the percentage of successful prosecutions.
It is clear, however, that the data with which to measure such
factors—and make comparisons over time—often do not
exist. There is also the problem that most figures for enforcement;
such as volumes of seized wood, could as much be the result of
an increase in illegal logging as a sign of its reduction. Nevertheless,
the current pilot assessment is seeking to gather implementation
and enforcement data wherever possible. The perceptions survey
of experts in producer countries will also provide data with which
to assess implementation and enforcement of government policies.
Private sector policy development and implementation
13. Quantifiable information on forest certification
(eg by the Forest Stewardship Council, FSC) and membership of
schemes such as the WWF Global Forest and Trade Network (GFTN),
the Tropical Forest Trust (TFT) and the Timber Trade Action Plan
(TTAP), all show that increasing numbers of companies are realising
that they need to take action on illegal timber. The growing awareness
of and interest in the issue of illegal logging and associated
trade has been the major driver in recent years for the dramatic
expansion of all these initiatives, both in terms of numbers of
companies and of their geographical range. The data reveals how,
as time has passed, concerned companies in consuming countries
have forced suppliers elsewhere to follow suit. The area of greatest
growth of supply-chain schemes is now among factories in China,
while much of the growth in forest management certification is
focused on Indonesia.
14. Evidence of impact from these schemes
is much harder to come by. Although they are issuing many more
chain-of-custody certificates to companies in China and elsewhere,
the FSC does not collect information on the volumes of certified
wood these companies are actually handling. Most of the companies
joining GFTN have done so very recently, and the only GFTN member
country to have produced any data on implementation at the time
of the 2007 study was the UK. The area of tropical forest whose
forest management is certified under all the main certification
schemes continues to expand, however, while volumes of timber
traded under the Malaysian Timber Certification Council (MTCC)
scheme have shown strong growth.
15. Although procurement policies in Europe
are expected to continue to drive a sharp increase in demand for
legally verified timber, so far there is little evidence to show
an increase in the price premiums available in the market for
such products. Better information is likely to be available in
the future, but the pilot assessment will seek to acquire additional
information drawn from private sector respondents through surveys
in producer and processing countries.
16. The financial sector has a key role
to play in tackling illegal logging and associated trade, and
the indicators will also seek to assess performance in this area,
though limited data is available. Finally, the indicators will
use trade data to monitor the extent to which the effectiveness
of bilateral trade controls in countries such as the EU and US
is undermined by timber being redirected to less sensitive markets.
Estimated levels of illegal logging and trade
17. Most estimates of illegal logging in
producer countries are drawn from wood-balance modelling studies,
which compare legal timber supplies (legal harvesting, legal imports)
with demand (domestic consumption and exports). Although analyses
of this kind have been carried out for many producer countries
in the past, methodologies vary dramatically and the studies are
rarely updated in a consistent manner. Chatham House is working
with partner organisations to collect the necessary data with
which to conduct its own wood-balance modelling analyses for producer
countries.
18. Wood-balance modelling also importantly
fails to capture illegalities in cutting, processing and trade
within the overall prescribed annual legal production, which in
some producer countries may represent the bulk of the problem.
Its use as an indicator should therefore be limited to assessing
the direction of change, rather than actual volumes or percentages.
19. Major reductions in illegal logging
in affected source countries should reduce timber supplies, and
it might be expected that this would generate a price response.
An analysis of price data for primary wood products in the focus
countries, however, shows that prices are generally a poor indicator
of changes in the level of illegal logging. Although there is
evidence that dramatic tropical timber price increases in South-East
and East Asia during 2005-06 were directly related to a reduction
in illegal logging in Indonesia, the response was dependent on
unique circumstances.
20. Trade data discrepancies can provide
a useful indicator of the volume of illegal trade, but only in
limited circumstances, where relatively large volumes of primary
wood products are traded (such as between Malaysia/Indonesia and
China). Discrepancies can also only give an indicator of the amount
of wood that is illegally exported, and not the overall amount
of illegally sourced timber being traded. An analysis of trade
data in recent years for the focus producer and processing countries
of the 2007 study[77]
showed that discrepancy analysis is unlikely to be a useful indicator
of trade from Brazil, Cameroon or Ghana, but is more likely to
be useful for trade between Indonesia/Malaysia and processing
countries such as China and Viet Nam. The pilot assessment will
examine trade data discrepancies for the initial focus countries.
21. One of the most difficult aspects of
the "end goal" to measure is the trade in illegal timber
into Western consumer countries such as the EU or US. Direct primary
product trade into these countries from affected producer states
is increasingly small, making discrepancy analysis unreliable.
The only other direct measure available is import source analysis—where
percentage estimates of levels of illegality in source countries
are multiplied by trade volumes. This method is a very blunt instrument,
however, since it is dependent on estimates of illegality at source
which are often very imprecise, and which are rarely updated in
a consistent manner over time. Given the lack of any other technique
by which to estimate volumes of illegal imports into consumer
countries, however, it may yet have a role.
CONCLUSIONS SO
FAR
22. Although monitoring of the indicators
is only just beginning, baseline data collected in the process
of developing the methodology do allow some tentative conclusions
to be drawn about the progress of the global response to illegal
logging. Our studies have shown that it becomes increasingly difficult
to measure change as one progresses along the stages of response
from initial awareness to actual changes in the forest, largely
because of the availability of evidence.
23. Nevertheless, it is clear that awareness
of the problem has grown across the board over the last few years.
The media has paid much more attention, governments have shown
more willingness to discuss the issue in international forums,
and companies in producer, processing and consuming countries
are increasingly alert. A growing number of national and international
NGOs have begun campaigning on the topic, and their activities
have played a key role in increasing awareness. Although this
growth in awareness was initially geographically limited, it is
beginning to spread more widely.
24. This growth in understanding has clearly
had an effect. Governments, international bodies and timber companies
are spending increasing amounts of money on tackling the problem.
A growing number of consuming countries have implemented procurement
policies requiring proof of legality, and a growing number of
timber companies have signed up to schemes meant to clean up their
supply chains. The evidence shows how this response has also spread
geographically in recent years. Companies in sensitive consuming
countries, driven by consumer awareness and new public procurement
requirements, have in turn demanded action from their suppliers
in places like China and Indonesia. Consumer and producer countries,
stymied in their joint efforts to halt illegal trade which is
indirect, have helped push the issue further up the agenda in
re-exporting countries. Even parts of the financial sector have
come on board.
25. It is much harder, however, to assess
the implementation by governments and companies of these new policies
and commitments, or what impact they have had, although more data
should be available in the near future. The limited evidence available
so far indicates that implementation is lagging behind commitment.
The vast bulk of timber illegally harvested in the main producer
countries is also traded and consumed outside the remit of the
new public procurement policies, supply chain controls of governments,
and companies in sensitive western markets reducing their potential
impact. Although trade statistics do not appear to show illegal
timber being diverted to less sensitive markets, this is probably
because the market impact of new initiatives has been too small
for any response to be visible. Consequently price premiums for
certified wood remain low.
26. Potentially of greater long-term importance
are initiatives by governments in producer countries, but suitable
data with which to gauge the implementation of new policies—such
as prosecution rates and seizure volumes—are rare or non-existent.
The only producer country where strong evidence exists of an actual
impact on the ground is Indonesia. Seizure data, prosecutions,
price changes, and wood-balance models all point to a significant
drop in illegal logging in the last two years.
FUTURE MONITORING
27. There is a clear need for some form
of regular independent monitoring of progress in the global efforts
to tackle illegal logging. This has become increasingly important
in recent years as larger and larger sums of money are committed
by donors countries, and as wide-ranging international trade measures
such as the Lacey Act amendment and the EU's FLEGT Voluntary Partnership
Agreements are implemented. Additional attention and resources
are likely to be brought to bear through increased interest in
tackling climate change, as governments come to appreciate the
critical role of poor forest governance in driving deforestation,
and the importance of deforestation in turn as a contributor to
climate change.
28. If the pilot assessment being conducted
by Chatham House is to be broadened and repeated, whether annually
or biennially, additional funding will be required from the donor
community, but it will also be important that efforts are made
to improve the availability of useful data. The FLEGT Voluntary
Partnership Agreements currently being negotiated by the EU with
producer countries provide an excellent opportunity to leverage
additional information from governments, and the need to monitor
the overall effectiveness of these agreements should provide additional
support to the goal of effective monitoring of the indicators.
October 2008
74 Emily Fripp, Illegal Logging and Related Trade:
Measuring the Global Response (Chatham House, March 2006);
available at http://www.illegal-logging.info/item_single.php?item=document&item_id=373&approach_id=1 Back
75
Sam Lawson, Illegal Logging and Related Trade: Measuring the
Global Response (Chatham House, December 2007); available
at http://www.illegal-logging.info/item_single.php?item=document&item_id=561&approach_id=1 Back
76
Out of the twelve listed above: ie France, Japan, Netherlands,
UK, US. Back
77
Producer countries: Brazil, Cameroon, Ghana, Indonesia, Malaysia.
Processing countries: China, Viet Nam. Back
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