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Memorandum submitted by the Department for Environment, Food and Rural Affairs (Defra), The Department for International Development (DfID) and The Department for Energy and Climate Change (DECC) (FOR14)
This memorandum sets out the steps the Government has taken to address forest governance and developing international incentives for reducing emissions from the forest sector.
Defra
is the central Government department with lead policy responsibility for
sustainable development. DFID is the
A. The role financial mechanisms might have in helping to address emissions from land use change; B. The environmental and social risks and benefits of using such financial mechanisms; C. The use of land use change credits in carbon markets and in meeting emission targets; D. The World Bank's Forest Carbon Partnership Fund; E. The role of technologies such as remote sensing in the verification of land use change credits; F. The success or otherwise of Government efforts in reducing emissions from international land use change; G. The Congo Basin Forest Fund; H. The interaction of carbon finance mechanisms with the timber trade; I. Government progress on tackling illegal timber since the EAC 2006 Report on sustainable timber; J. Government sustainable procurement of forest products; K. The success or otherwise of the EU Forest Law Enforcement, Governance and Trade (FLEGT) Action plan, and Government support for it .
The Committee should note that this Memorandum does not include the findings of the Eliasch Review, published in October. This is an independent review commissioned by the Prime Minister to examine the financial mechanisms that can reduce deforestation in developing countries.
A. The role financial mechanisms might have in helping to address emissions from land use change
1. Incentivising sustainable land use is a priority for the Government. The IPCC estimates that deforestation and land degradation account for approximately 18% of annual global carbon dioxide emissions. The Government was therefore pleased with the agreement at the UNFCCC in Bali in December 2007 which agreed to incentivise Reduced Emissions from Deforestation and Degradation (REDD) in developing countries in a post-2012 climate agreement. The agreement contained the following key elements: · recognition of the needs of local and indigenous communities, and the relevant provisions of other international negotiating fora on forests (e.g. Convention on Biological Diversity). · inclusion of degradation (carbon stock reduction below the change in land use leading to deforestation) as well as deforestation itself. · encouragement of demonstration activities and indicative guidance for these activities. · specific linkage of deforestation, degradation, and the sustainable management of forests, to broader climate negotiations under the Bali Action Plan. · recognition that demonstration activities should be taken into account in future negotiations under the Bali Action Plan. This allows the possibility that emissions reductions achieved before 2012 could be taken into account subsequently.
2. The agreement set out a process under the Bali Action Plan establishing how to achieve a mechanism to reduce emissions before climate talks in Copenhagen in 2009. Action will also provide significant benefits for communities who depend on forests, and for biodiversity.
3. Deforestation is caused by many factors, but a key factor is that other land uses e.g. agriculture, grazing, infrastructure development, extraction of minerals are more profitable than keeping forests standing. Payments for the environmental services that forests provide would help to increase the value of standing forests. This is similar to the premise behind the new EU Common Agricultural Policy which incorporates elements where farmers are compensated for provision of environmental services as opposed to production.[1]
4. Reducing deforestation will be expensive; available estimates suggest it will cost in the range £10 billion to £20 billion a year to halve deforestation by 2030. However, the evidence also suggests that the benefits of reducing deforestation will be many times greater than the costs. The annual loss of ecosystem services from deforestation is estimated by the Economics of Ecosystems and Biodiversity Study[2] to be between £1.1 - £2.5 trillion.
5. There are different proposals for funding being discussed to incentivise reduced emissions from deforestation and forest degradation, and additional action to preserve and enhance standing forests. These include fund and market-based solutions. The Government considers funding for positive incentives to reduce deforestation of the magnitude needed are in the long-term most likely to come from the carbon market. In the interim, market mechanisms should be considered (subject to certain conditions) together with other sources of finance. We are in discussion with other countries and international financial institutions to maximise funding available. This needs to be considered in conjunction with demands for financing for low carbon technology and adaptation.
B. The environmental and social risks and benefits of using such financial mechanisms
6. Financial incentives will not address greenhouse gas mitigation in the forest sector if forest governance is weak. In many countries illegal activity - both through logging and land conversion - has been one of the most significant drivers of deforestation and forest degradation. In order for such financial mechanisms to work effectively and deliver environmental and social benefits it will be vital to address issues of forest governance and build on existing national and internal initiatives in this area.
7. More than a billion people depend on forests to provide them with a livelihood. The Bali Action Plan recognised "that the needs of local and indigenous communities should be addressed when action is taken to reduce emissions from deforestation and forest degradation in developing countries". In order to access a financial mechanism for forestry it will be important that land ownership rights are well defined and that indigenous and local user rights respected in terms of ownership of the carbon asset and distribution of the carbon revenue. In addition it will be necessary to establish clarity of coverage and application of national forest laws (based on national consensus of forest policy aims) and build capacity for their enforcement. In support of such aims DFID helped establish and fund the Rights and Resources Initiative to accelerate policy, tenure and market reforms. For details see: http://www.rightsandresources.org/
8. To ensure that the maximum environmental benefits of paying for the carbon mitigation services of forests are achieved the Bali Action Plan also recognised the relevant provisions of other international agreements such as the Convention on Biological Diversity (CBD) and the United Nations Forum on Forests (UNFF). The CBD agreed this year to convene an Ad Hoc Technical Expert Group (AHTEG) on biodiversity and climate change to provide biodiversity-relevant information to the United Nations Framework Convention on Climate Change . The first session will be hosted by the UK from 17-21 November this year and will provide scientific and technical advice on ensuring that possible actions for reducing emissions from deforestation and forest degradation support the conservation and sustainable use of biodiversity.
C. The use of land use change credits in carbon markets and in meeting emission targets 9. We must include forests in a future climate change agreement if we are to reach the European goal of limiting temperature increase to 2ºC and will be seeking the deepest deal we can achieve in Copenhagen. It is difficult to see how sustainable funding at the scale required for effectively tackling deforestation and promoting Sustainable Forest Management can be provided through public funding alone. Ultimately, we need to build a mechanism which is self-sustaining, and the market seems to offer the best opportunity for this in the long-term.
10. We welcome the provision contained in the draft EU Emissions Trading Scheme Directive for new crediting mechanisms under an international agreement. This would give the flexibility to include credits from avoided deforestation and other land use activities in future phases of the EU ETS and will encourage other emissions trading schemes to also include such credits. We look forward to the forthcoming Communication from the European Commission on Deforestation and its Impact on Climate Change and Biodiversity Loss.
D. The World Bank's Forest Carbon Partnership Fund
11. In order to prepare the ground for the establishment of a forestry credit mechanism it will be necessary to carry out further research to estimate emissions as well as undertake capacity building and pilot demonstration activities.
12. To maximise aid effectiveness it is imperative to ensure a coherent approach to the provision of funds and the Government is working to promote co-ordination between multi-lateral funding initiatives. The UN agencies are developing a joint paper with the World Bank which will set out how the UN-REDD programme will contribute to the World Bank Forest Carbon Partnership Facility (FCPF) (both designed to support capacity building and technical assistance) and the developing Forest Investment Programme (FIP) (being designed to address investment needs). In addition the FCPF Carbon Fund will test how to make payments for REDD credits.
13. The Government is providing £15m to the World Bank FCPF which aims to provide US$300 million split between a Readiness Fund (support to prepare 20-30 countries for participation in REDD pilot schemes) and a Carbon Fund (piloting payments 3-5 countries for reducing deforestation below an agreed level).
14. At the first Steering Committee meeting in Paris on 9-10 July, the following 14 countries were selected for support in the preparation of REDD Action Plans: Bolivia, Costa Rica, Democratic Republic of Congo, Gabon, Ghana, Guyana, Kenya, Lao, Liberia, Madagascar, Mexico, Nepal, Panama, Vietnam.
15. The Government is also working with the World Bank on the development of a Forest Investment Programme (FIP) under the Strategic Climate Fund (SCF) by the end of 2008. The FIP has an indicative budget of US$1 billion. It will assist the change towards low carbon emissions by investing in institutional capacity, forest governance, sustainable forest management and, where appropriate, actions outside the forest sector such as alternative rural livelihoods.
16. The UN Environment Programme, UN Development Programme and the Food and Agriculture Organisation have developed a multi-donor trust fund to provide technical assistance to developing countries on REDD. The aim is to bring together the relative experience, skills and country presence of the UN agencies through a 'one UN' approach.
E. The role of technologies such as remote sensing in the verification of land use change credits
17. The IPCC provides methods for estimating emissions and removals and changes in carbon stocks relative to a baseline. This will benchmark performance in carbon savings. The methods cover deforestation, degradation and forest enhancement. Emissions from deforestation are likely to be easier to estimate, because changes in land use are easier to detect. Work is underway internationally on the application of the IPCC methods and the technology and availability of data will improve over time.
18. It is recognised that satellite imagery alone will not be sufficient to provide robust estimates of land use change, and a two tier approach where remote sensing techniques are used in conjunction with ground-based methods is preferable, in order to verify the interpretation of the satellite imagery. In order to reduce uncertainty and costs, it has been suggested that ground based monitoring be based on sampling using a risk based approach.
19. Examples of national operational forest cover monitoring systems using satellite imagery include the Brazilian PRODES annual surveys by INPE and the Indian biennial surveys by FSI. The Brazil surveys are supplemented by the DETER system which monitors forest cover and identifies anomalies in primary forest cover using coarse resolution satellite data, and the DETEX system which identifies anomalies in primary forest cover that can be associated with selective logging using medium resolution satellite data. The FAO 2010 remote sensing survey will provide a global assessment and the Global Observation of Forests and Land-cover Dynamics (GOFC-GOLD) initiative of the Global Terrestrial Observing System is developing a source-book relevant to the application of IPCC methods.
20. The UK Government is in the process of letting a contract to develop and apply methodologies for reduced emissions from deforestation and forest degradation (REDD). The research will take the form of a review, including recommendations, of available literature and information sources covering three key areas - forest data and methodologies for deriving emissions estimates; exploring the causal link between forest use and drivers; and the development of reference levels. Through our support to the Congo Basin, the UK is supporting the expansion of community forest mapping (from Cameroon and the Democratic Republic of Congo (DRC) to Congo-Brazzaville, the Central African Republic (CAR) and Gabon), and facilitating the installation of a satellite data receiving ground station.
F. The success or otherwise of Government efforts in reducing emissions from international land use change
21. Although there have been changes in deforestation rates and increases in areas of certified sustainable production, deforestation and degradation rates are still too high. The first commitment period of the Kyoto Protocol (ending in 2012) does not contain measures to reward forest conservation or improved forest management in the tropics because of historical difficulties related to measuring emissions accurately. Whilst afforestation and reforestation were allowed for under the Clean Development Mechanism (CDM) deforestation was excluded as the project-based approach risked displacement of deforestation elsewhere, with little or no net gain.
22. There has been much work by the IPCC to develop improved estimation methodologies. The UK has made an important contribution to this. In the negotiations, the proposals to use national baselines have opened the way to including reduced emissions from deforestation and associated activities in a future climate agreement and this is provided for in the Bali Action Plan. The Government will continue to work to resolve outstanding methodological issues and work bilaterally and with international organisations to develop pilot projects, building on the rules agreed in Bali and the progress made on funding since then. This will contribute to the achievement of a decision text in time for Copenhagen that will integrate forestry into the final Climate Change deal and so treat emissions from forestry in line with emissions from other sectors. Improved methodologies can also allow for simplifying procedures and reducing transaction costs for afforestation and forestation projects under the CDM.
23. The Forestry Commission was a founder member of the Global Partnership on Forest Landscape Restoration and through this initiative has shared its skills and experience of restoration with other countries.
24. The Government is also looking at how to maximise the contribution from the land use, land use change and forestry (LULUCF) sector in developed countries by reviewing the current rules. Following introduction of the Good Practice Guidance by the IPCC we have seen very significant improvements in estimating and reporting emissions and removals from LULUCF by developed countries. The climate negotiations are currently considering the future treatment of LULUCF in meeting commitments of developed countries UK is seeking a more comprehensive treatment than was possible for the first commitment period under the Kyoto Protocol.
25. The Government is in the process of letting a contract to increase understanding of what, in practical terms, the options identified to date in the UNFCCC discussions mean with regard to the trends in emissions and removals from countries, the additional mitigation potential that they introduce and any additional risks to compliance introduced by statistical fluctuations, e.g. due to forest fires or insect attack.
26. In addition, the Government is working to ensure that efforts to reduce greenhouse gas emissions are not unduly affected by unintended emissions due to land use change. The UK's Gallagher Review concluded that UK biofuels policy should take better account of the effects of growing crops for biofuels on land use change and food prices. In view of these findings, the Government has urged caution in the move to biofuels development, and is pressing for sustainability criteria for biofuels and biomass to take indirect land use change into account. The Government is working to achieve this in negotiations within the EU.
G. The
27. In March 2007 the Government pledged £50m for sustainable management of the Congo Basin ecosystem through a 'Special Fund' called the Congo Basin Forest Fund (CBFF). This is financed from the £800m International Window in the UK's Environmental Transformation Fund (ETF-IW), which seeks to achieve poverty reduction through tackling environmental problems and to effect real change and progress on climate change adaptation and mitigation in developing countries.
28. The aim of the CBFF is to deliver poverty reduction by developing the capacity of the people and institutions in Congo Basin forest countries to sustainably manage their forest; helping local communities to find livelihoods that are consistent with forest conservation; and providing innovative and transformative approaches to sustainable forest management. The Fund was officially launched by the UK Prime Minister, in London, in June 2008. Its current total value has increased to £100m, through the Norwegian Government matching the UK's £50m funding.
29. The Fund has invited proposals for transformative and innovative initiatives that will slow the rate of deforestation, through developing the capacity of the people and institutions in the countries of the Congo basin to manage their forest. This includes helping local communities find livelihoods that are consistent with forest conservation and developing innovative and transformative approaches to sustainable forest management. Proposals are being sought from regional governments, civil society and private sector.
30. The Fund will support activities which complement particular aspects of the COMIFAC (The Central Africa Forests Commission) Convergence Plan, with particular focus on three strategic areas. It will work closely with Central African governments and other stakeholders, whilst strengthening the work of the aid donors who are already active in the region, and will open a channel for new donors to add their support.
31. In establishing the Fund, it was considered important for it to be housed in an African regional institution with legitimacy amongst Congo Basin countries. The Africa Development Bank (AfDB) has agreed to host the initiative as a "Special Fund" as well as a CBFF Secretariat, to deal with the day-to-day management and disbursement of the fund. The Fund will be separate from AfDB business, but will complement their existing work in all sectors of the 10 countries of the Central Africa Forest Commission (COMIFAC). It will also complement the AfDB's future plans on natural resources management in Central Africa. Currently UK based DFID staff are acting as the interim Secretariat for the Fund, until all Fund administration mechanisms and staffing are fully established at the Bank (expected early 2009).
32. A Governing Council (GC) has been established to provide strategic guidance and oversight of the fund, and to ensure broader long-term donor and stakeholder participation. The GC is led by two Co-Chairs: Professor Wangari Maathai and the Rt. Hon. Paul Martin (Former Prime Minister of Canada). Other members of the Council include representation from civil society, COMIFAC, AfDB, CEEAC, and CBFF donors.
H. The interaction of carbon finance mechanisms with the timber trade
33. It will be important that any agreement on a forestry mechanism takes into account the potential for leakage as international markets for timber and agricultural commodities are likely to increase pressure where forest protection is less strict. However protecting forests is not about preventing use of forests but incentivising sustainable management. Examples of how financial incentives can be used include: a) Capacity building to enhance management of forest resources, improve forest governance and address illegal logging in production forests b) To introduce transparent timber allocation, certification and chain of custody processes. c) To provide financial and other incentives that will help to accelerate an ongoing trend towards community forest ownership and management, and reduced reliance on government-financed forest administrations. d) Through company/community partnerships, accelerated private sector investment in afforestation and reforestation and in establishing industrial plantations and small holder-owned farm forests and agro-forestry farming systems, which can help take the pressure off natural forests.
I. Government progress on tackling illegal timber since the EAC 2006 Report on sustainable timber
34. The Government has continued its efforts to tackle illegal logging and associated trade in illegal timber, under its Forest Governance & Trade programme. Actions taken by the Government can be divided into: (i) supply side actions - those taken to assist timber-producing countries where illegal logging is a problem, to improve forest governance and law enforcement; and (ii) demand side actions - those taken in countries that import timber to eliminate illegally-produced products from their markets.
35. Supply side measures have focussed on support for negotiation of FLEGT Voluntary Partnership Agreements (VPAs) under the EU Action Plan. See section K of this submission. At present one country, Ghana, has signed a VPA and four other countries in Africa and Asia are negotiating VPAs. Several other countries are expected to commence negotiations in the next few months. The EU is confident that these negotiations will deliver a comprehensive agreement. Demand side measures have focussed on: implementation of the Government's public procurement policy (see section J) and support for actions by the private sector. See DFID's website, booklets and films DFID has commissioned to explain this work: http://www.dfid.gov.uk/mdg/forest-govern-trade2.asp http://www.dfid.gov.uk/pubs/files/illegal-logging-report.pdf http://www.handcraftedfilms.net/films.html
36. The UK has been persistent in encouraging the Commission to consider additional legislation to support EU FLEGT, recognising that bilateral trade measures can be circumvented, and that further EU-wide legislation is required to help to combat trade in illegal timber. UK-led analysis and discussions with stakeholders has helped to inform the debate, and we continue to share our thinking with the EC and other Member States. The UK submitted the following response to the EC consultation on options: http://www.illegal-logging.info/uploads/UK_govt_consult_add_options.pdf and has been urging the Commission to come forward with proposals.
37. DFID has commissioned work from Chatham House to track progress in tackling illegal logging at a global level. An interim report was published in November 2007, see: http://www.illegal-logging.info/uploads/Measuring_the_response.pdf
38. The Committee is referred to the following documentation about China, Europe and North Asia Forest Law Enforcement and Governance (ENA FLEG) Conference, G8 and circumvention raised in its 2006 Report:
· China: At the EU-China Summit in See, Proceedings of the EU-China Conference on Forest
Law Enforcement Governance and Trade, http://www.illegal-logging.info/item_single.php?item=event&item_id=117&approach_id
· ENA FLEG see: http://www.iisd.ca/ymb/enafleg/ymbvol110num5e.html See also the following for a presentation on the
measures http://www.illegal-logging.info/item_single.php?item=presentation&item_id=287&approach_id
· G8: The See a presentation on the measures http://www.illegal-logging.info/item_single.php?item=presentation&item_id=287&approach_id See also the report from the 2008 G8: http://www.g8summit.go.jp/doc/pdf/0708_08_en.pdf
· Circumvention and illegal imports: to note that
39. Timber procurement: the Government announced that its timber procurement policy would be strengthened in 2009 by purchasing only sustainable timber products or timber products produced in accordance with FLEGT licences. This policy change will help to encourage better forest management and engagement with the FLEGT process. More information on implementation of the current policy can be found under section J.
40. In anticipation of a successful outcome for the wider aims of FLEGT and a more widespread adoption of good forest management, the Government has set a target of 2015 for restricting its purchases of all forest products to those from sustainably managed forests. The policy is just coming into effect and will be reviewed in 2011 to monitor effectiveness and progress.
41. The Government and the Central Point of Expertise on Timber (CPET) are actively engaged in preparations for implementation of the new policy: new guidance was issued in August; a programme of training will be delivered to central departments before April 2009; and Ministers and senior officials continue to exploit opportunities to raise awareness of the forthcoming change in requirements (Defra Secretary of State wrote to Cabinet colleagues in September to highlight the new policy requirements).
J. Government sustainable procurement of forest products
42. The EAC 2006 enquiry highlighted the need for better information with which to measure performance. Therefore Defra has worked closely with the Sustainable Development Commission to include timber within the reporting framework for the Sustainable Development in Government Report. The 2009 report will include information on a number of specific questions related to timber procurement. However, as timber is purchased in so many forms and for so many purposes, it was considered that more detailed information was needed. This raised concerns about the costs of data collection and reporting so work has been undertaken to establish the most cost-effective way of gathering this information. The Government undertook a study into the supply of timber for Government construction projects (construction is one of the biggest users of timber) working closely with both procurement officials and construction sector companies. Based on the recommendations from the project, Defra has started to pilot new monitoring and reporting systems to track timber purchases within the department. The aim is to share successful approaches with Whitehall Partners in order to develop a new system for recording and reporting volumes of timber purchased throughout central government over the next year.
43. The Government has given further
consideration to the inclusion of social criteria in the timber procurement
policy, such as the requirement that forest management respects the rights of
forest dependent people (something which is already routinely required by
forest certification schemes) The Government has been in regular discussion
with the Office of Government Commerce, the European Commission, and other
Member States with a view to considering the benefits and constraints to
including such criteria. We will continue these discussions with others in
44. CPET has continued to inform and raise
awareness of best practice for timber procurement, review and monitor forest
certification schemes and investigate supply chain and customer activities.
Notable actions connected with CPET's work since the EAC 2006 Report include
changes made by two major certification schemes (including PEFC) to raise their
standards and market credibility, the publication of robust assessment guidance
for non certification (Category B) evidence, pilot schemes and training for
local authority champions and greater engagement with other European Member
States in the quest for harmonisation. In
addition, CPET resources such as the website are being widely used by countries
outside the EU such as the
45. The Government is determined to continue improving its performance on purchasing sustainably produced forest products, moving to fully sustainable sources and encouraging others to do the same. The information we have indicates that implementation remains patchy. Some departments and agencies are ahead of others but it is clear that there has been a significant move over the last 12-18 months and growing commitment to ensure full implementation. The achievements made will be used to inform and develop sustainable procurement practice more generally, including the recently established Centre of Excellence for Sustainable Procurement (CESP).
K. The success or otherwise of the EU Forest Law Enforcement, Governance and Trade (FLEGT) Action plan, and Government support for it
46. In tackling illegal logging and its associated trade, it must be recognised that poor forest governance underlying cause is rooted in systems of political patronage, corruption, inconsistent legal frameworks, weak law enforcement and poverty. These problems must be resolved by the governments and citizens of the countries in which these forests are found, as part of wider governance reforms and by specific actions related to forests.
47. Development co-operation: This aims to promote equitable and just solutions to the illegal logging problem by helping timber-producing countries build systems to verify that timber has been legally harvested; promoting transparency of information; building capacity of governments and civil society; and promoting policy reform.
48. The European Commission and member states have
initiated development co-operation programmes that support FLEGT's aims in a
number of countries. These include
49. Trade in timber: The Action Plan's medium term aim was negotiation and implementation of bilateral voluntary partnership agreements (VPAs) between timber-producing partner countries and the EU, whereby the partner countries would issue licences attesting to the legality of their timber exports to the EU, and EU border control agencies would allow import only of licensed timber from partner countries. In addition the European Commission planned to review options for further measures, including the feasibility of legislation to control the imports of illegally produced timber into the EU. A longer term goal was dialogue with both wood-producing and wood-consuming countries to strengthen international collaboration to tackle illegal logging and, ultimately, to develop a multilateral framework on which actions could be based.
50. Before starting VPAs negotiations, it was necessary to
pass enabling EU legislation. Under the UK's EU Presidency in 2005, two
essential instruments were adopted: (i) the FLEGT Regulation, which
empowers EU border control agencies to require FLEGT licences for
importation of timber shipments from partner countries; and (ii) the
negotiating directives - an internal document that gives the Commission a
mandate to negotiate VPAs on behalf of Member States, and sets out the expected
elements to be included in each VPA. In 2006, formal agreement to start
negotiations was reached with
51. Getting to this starting point was not a foregone
conclusion for any country. Each had to be convinced that an agreement
that would potentially restrict its trade would deliver net benefits. In
all cases, negotiations have been complex and have required investment in
confidence building as well as patience to deal with a range of sensitive
issues. Negotiations with
52. Stakeholder consultations in partner countries have played an unforeseen role in initiating dialogue on a range of forest governance issues, some of which fall outside the terms of VPAs. These include increased demands for transparency and consideration of tenure rights of forest-dependent communities.
53. DFID has funded the processes in
54. With regard to additional legislative options to
deal with illegal timber traded outside VPAs, the UK Government has pressed the
Commission to publish its proposal but action was not taken until late
2006 when a public electronic consultation about a range of alternatives was
launched. See the
55. Efforts to encourage other timber importing countries
to introduce measures to tackle illegal logging have focused on the
56. Public procurement: Since procurement is an area of member state competence, the Action Plan aimed to produce practical information to guide contracting authorities on how to draw up procurement procedures that specify legality.
57. When the Action Plan was announced, only two EU member
states (
58. In July 2008, the Commission published a new proposal to set targets for Green Procurement. This recognises the special requirements for timber products within guidance on construction, furniture and paper products. These state that legality should be a minimum acceptable standard and suggests FLEGT licences as a way to assure legality.
59. Private sector initiatives: The Action Plan aimed to encourage private sector initiatives for good practice in the forest sector, including the use of voluntary codes of conduct to source only legal timber. The private sector in several EU member states has been closely involved with implementation of the FLEGT Action Plan. Trade associations are regularly consulted on different aspects of the Plan, for example to ensure that provisions in new legislation are workable in practice.
60. Commission and member state support has been
provided for private sector initiatives that aim to eliminate unknown and
potentially illegal timber from supply chains. These include the EC-supported
Tropical Timber Action Plan and WWF's
61. Financing and investment safeguards: The Action Plan aimed to encourage financial institutions which invest in the forest sector to develop due diligence procedures which take account of the environmental and social impact of their lending; including conformity with relevant legislation. It also aimed to encourage Export Credit Agencies to develop guidance on improved project screening procedures and codes of practice for forest sector projects.
62. Research, supported by DFID, has been conducted to examine the feasibility of requiring finance institutions, including EU Export Credit Agencies, to undertake specific due diligence to ensure investments do not result in illegal timber production. This has proven difficult, largely because of the diverse nature of the finance sector.
63. In
conclusion, a great deal of progress has been made in improving forest
governance and trade. Most tropical developing countries as well as countries
such as
[1]
See http://ec.europa.eu/agriculture/rur/index_en.htm.
"Agri-environment measures are designed to encourage farmers to protect
and enhance the environment on their farmland. It provides for payments
to farmers in return for a service - that of carrying out
agri-environmental commitments that involve more than the application of usual
good farming practice. Farmers sign a contract with the administration and are
paid for the additional cost of implementing such commitments and for any
losses of income (e.g. due to reduced production) which the commitments entail.
Agrienvironment payments are co-financed by the EU and the
[2] See: http://ec.europa.eu/environment/nature/biodiversity/economics/index_en.htm Sukhdev et al; 2008 |