July 1999

Joint NGO position on DG III's discussion paper 'The EU forest-based and related industries into the third millennium'

General comments

The Undersigned NGOs are very disappointed by DG III's paper 'The EU forest-based and related industries into the third millennium’ (July 1999). The paper omits vital information, is incoherent, and in some instances contradictory to DG III's earlier paper.

NGOs are surprised that their key comments requested by DGIII on the working document presented during the first consultation have not been taken into account when drafting this discussion paper. We will take this opportunity to reiterate our key concerns regarding the first draft that we believe are still valid as well as more general comments on the structure and content of the text below.

Key concerns as mentioned in 'Joint NGO Comments on the DG III Working Document':

Sustainable development versus competitiveness: Long-term sustainable competitiveness of EU FB-I can only be ensured if it is based on sustainable development of the whole EU FB-I sector;

Sustainability of the resource base: A sustainable resource base, i.e. the forest, is a prerequisite to long-term sustainable development of EU FB-I. The Communication should discuss Sustainable Forest Management (SFM) in relation to a sustainable production of the FB-I.

Economic, Environmental and Social Aspects: The Commission stressed that sustainable development includes economic, environmental and social aspects and that these three pillars are equally important. However, this is not reflected in the current discussion paper and needs to receive more attention in the Communication. The Communication should provide solutions on how to integrate the environment into FB-I industry policy and acknowledge that the integration of the environment and social issues provides an opportunity to improve FB-I sustainability and therefore long-term sustainable competitiveness. At present the draft working paper gives the impression that environmental and social legislation are constraints to EU FB-I competitiveness;

Fair trade versus free trade: The EU should promote fair trade rather than free trade. The Commission should investigate the potential for fair trade and what impacts the un-fair trade policies of third governments have on the competitiveness of the EU FB-I.

Promotion of wood products consumption: the consumption of forest products as a potentially renewable resource should only be promoted when they come from well-managed forests and at sustainable production levels;

Evaluations and individual responsibilities for implementing objectives: The Communication should be based on the conclusions and recommendations of sectoral studies. These should be made publicly available. Clear policy objectives should be stated as well as the time scale for implementing the actions outlined to improve sustainable competitiveness and individual responsibilities, especially those of DG III.

Critique on DG III paper: 'The EU forest-based and related industries into the third millennium' (July 1999)

1. Vital Documentation is missing

  • The discussion paper reiterates throughout that the statistics on Forest Based Industries (FB IND) are insufficient. It might be logical to have first addressed this problem and carried out any necessary studies based on this new information on FB IND before developing a discussion paper to enhance the sustainable competitiveness of all FB IND.
  • Sources of documents and data are missing.
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2. Format is unclear

  • The Introduction and Challenges are physically separated from actions, resulting in text inconsistencies (e.g. sections 2.5 and 3.5 are supposed to be complementary but they are four pages apart making comparison difficult and also the content is different).
  • The document is made up of statements that are not always backed up with facts or figures. When stated, facts and figures are not referenced. ( e.g. "As regards consumption in Europe at the moment, 70% of the annual growth of EU wood resources are being used which implies that there is scope for further development of the wood based industries").
  • Poor English and lack of explanation of abbreviations (e.g. CEEC, SMEs, LCA ) make the content of the document unclear.
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3. Analysis is incomplete

  • There is no reference to the Strengths Weaknesses Opportunities and Threats (SWOT) study (are there others?) undertaken which is supposed to have formed the analytical basis of the last working document and therefore this discussion paper.
  • There is little distinction between the different sectors that make-up the FB- IND. The discussion paper does not identify and consider the many different industries that make up the forest sector. There even seems to be a difference between what DG III thinks the forest based industries consist of. It seems only to emphasise those with the heaviest political weight. For instance, there is no apparent analysis of the employment generated, profitability and environmental contributions of small and medium sized enterprises (SMEs) as compared to multinational companies (MNCs). The paper does not reflect the different Member States' priorities with regard to the FB-IND. This discussion paper appears biased towards the structure of forest industries in Scandinavia.
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4. There is a lack of coherence with other EU policies

  • There is no coherence between this paper and other EC directives, regulations, resolutions, strategies, communications and programmes. For example:

The Council Resolution on Forests (1999/C 56/01)

The Rural Development regulation and its draft implementation regulation (EC 1257/1999)

Phare and Tacis aid regulations and their priorities, objectives and programmes

Comments on Content

1. Globalisation

  • This section should focus on all aspects of sustainable development not only in the context of environment.
  • No concern is expressed for the existing deforestation rate, nor for forest degradation. A future round of trade negotiations leading to further liberalisation could worsen the already bad situation the world's forests are facing. NGOs would like to see this point addressed. A possible action point would be to carry out a sustainability impact assessment on trade policies to be negotiated at the next Trade Round.
  • There is no discussion of the types of EU based forest industries operating in Asia, South America or Africa: nor of the importance of Non Timber Forest Products.
  • The EC's support to enhance the availability of venture capital is a form of subsidy and therefore possibly a non tariff barrier to trade and does not promote sustainable competitiveness.
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2. Enlargement

  • The approach of the discussion paper to the forest resources in candidate countries does not focus enough on the provision of adequate technical and financial resources in order to ensure sustainable management of their forest resources. This is the basis of their long term sustainable competitiveness.
  • In this document DG III seems not to be taking into account the initiatives already undertaken by other Commission DGs to support the above (notably under the Phare programme). In particular it does not consider the constraints they face which might be complemented by DGIII's activities.
  • The emphasis on monitoring and information gathering under Challenges and Action points gives the impression that there has been little prior analysis on the part of DG III of the forest sector in candidate countries. Besides, monitoring alone will not ensure adequate transposition and implementation of EU legislation.
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3. Environment and Energy

  • EU Environmental Legislation should not be adapted to FB IND as the document suggests. Rather, FB IND should respond to the increased recognition of the importance of the environment for sustainability of all forest based activities. DG III should encourage industry to anticipate and adapt to new environmental demands.
  • DG III focuses on assessing monitoring and reporting in order to address environmental issues. This is insufficient. Sustainable Forest Management (SFM) is an evolving concept that nevertheless needs active implementation. DG III must actively support this.
  • Energy and environment warrant separate headings. Achieving energy efficiency does not encompass all aspects of environment sustainability.

4. Technological Evolution and Human Resources

  • A well functioning competitive industry should have its own R&D facilities as part of its cycle. The concept of sustainable competitiveness should encompass the allocation of resources to R&D facilities in the FB IND.
  • A sustainable FB IND is a pre-condition to attracting a dynamic and qualified workforce. In many European countries local and small and medium FB IND are displaced through the perceived need for increasingly large scale enterprises. The importance of SMEs is not even considered by this paper.
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5. International and EU regulatory and Economic Framework

  • SMEs are mentioned under challenges with no prior introduction in the document. Considering the importance recently attributed to SMEs in development co-operation in other parts of the Commission it is surprising that this has not been addressed.

6. A good image

  • A good image should only be achieved through good practice. Greenwashing is unacceptable.

Omitted Factors

  • Sustainable consumption is not even mentioned. See key concerns addressed above.

Conclusions

There is an opportunity with the proposed communication to lay one of the foundation stones for the sustainability of the entire EU FB-I in terms of providing relative stability to those employed within it and in terms of its environmental impact both within the EU and outside it. The EU could support environmental and social organisations to educate the public as to the need for the consumption of recycled wood and fibre based products and wood from independently certified sustainably managed sources. The competitive advantage the EU has in terms of its ability to respond to both environmental and social issues should be capitalised on. This might be called playing the ‘green card’ in the hand that we have dealt ourselves. Industry, Government and civil society should pull together to create a sustainable marketplace with respect to what and how much it consumes.

Some major industry players however seem to have a different response to the threats to EU markets posed by globalisation. Their response has been to globalise themselves, setting up production facilities in Indonesia, China and elsewhere and looking to export products from these regions to the EU. The externalities of these operations may not only have major detrimental impacts on the social and environmental conditions where they are located but may also impact European interests, by undercutting the market for European timber for example. We wonder what the perspective on this dynamic is from the 12 million forest owners mentioned in the discussion paper.

In its discussion paper and the approach it has taken to this meeting, DGIII seems to have adopted the position of big business, and ignored major areas of concern Although it is unclear how and even if this input will be considered in the final Communication we urge those responsible to look at both wider and longer term sustainability issues which are fundamental to the future of the EU FB-I.

Gemma Boetekees Friends of the Earth, Netherlands

Saskia Ozinga FERN, Europe

Stuart Wilson Forests Monitor, UK

Fern is an NGO which advocates changes in European Union activities in order to achieve: conservation and sustainable management of forests; respect for the rights of forest peoples; greater transparency in EU aid to tropical forest countries.

FERN

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