Informing NGOs, MEPs, Member States, the European Commission and the media. Issue 109, October 2006.

EU–Malaysia: VPA negotiations to start

The Malaysian Minister for Plantation Industries, Mr Peter Chin, and Commissioners Louis Michel and Stavros Dimas, responsible for Development and Environment respectively, agreed on 25 September 2006 to start formal negotiations towards a voluntary partnership agreement (VPA) to control illegal logging. Environmental and social NGOs in both Europe and Malaysia are concerned that this announcement has been made without Malaysian NGOs having yet been formally consulted. No clear indications have been given about a proper consultation process taking place that would be acceptable to Malaysian environmental and social NGOs. Furthermore, as argued by FERN, Greenpeace, Global Witness and WWF, ‘good governance’ in Malaysia, which must be at the heart of any VPA,¹ is still a long way off. Serious land disputes, an inadequate certification scheme, and high levels of corruption are still causes for concern. According to a recent study by the World Bank, up to 35 per cent of exports from Malaysia were illegally sourced;² and in its latest market update the ITTO³ highlighted the fact that most of Malaysian’s forests have disappeared, stating: ‘faced with a chronic shortage of raw material supply and with no solution in sight, prices of Malaysian timber products have risen across the board. Meanwhile, the local timber industry is urging various state governments to grant more timber concessions to mitigate the shortage of raw materials.’

In this context it is possible for a VPA to make a difference, but only if it starts with a countrywide, honest and open consultation process in which all stakeholders can take part. Malaysian NGOs have proposed such a process.⁴ The ball now lies in the government’s court.

1 See joint NGO statement available at: http://www.fern.org/media/documents/document_3760_3761.pdf

2 Forest Law Enforcement and Governance, Report 36638-GLB0, September 2006.

3 Volume 16, no. 2, 2006.

4 See: Forest Governance in Malaysia, recommendations for a VPA at www.fern.org

Europe’s money to move Turkey away from accession?

In October 2006, three European export credit agencies (ECAs) are expected to decide whether or not to finance one of the world’s most controversial infrastructure projects. The Ilisu Dam proposal is a decades-old plan to build a hydroelectric power plant on the River Tigris in the Kurdish region of South-east Anatolia in Turkey (see FW 97). Going ahead with the project would mean displacing tens of thousands of people, destroying a significant cultural heritage, and increasing the potential for serious conflict over water resources with neighbouring Iraq and Syria. The project utterly fails to meet European Union standards, and a number of EU and international laws and policies, including the European Convention on Human Rights, are being violated – thereby moving accession candidate Turkey away from the EU acquis. These concerns have prompted the European Parliament to call on Turkey ‘to apply the EU environmental standards to projects … such as the Ilisu Dam’ in its recent progress report on Turkish accession.¹ It is critical that the European Commission takes action now to ensure that Turkey heeds these concerns.²

1 European Parliament, Report on Turkey’s Progress towards Accession, September 2006.

2 For a comprehensive assessment of the project in the context of Turkish accession see: FERN/European ECA Reform Campaign, The Ilisu Dam Project: Europe’s money would move Turkey away from the acquis communautaire, September 2006.

EU institutions reach DCI agreement

After many months of difficult negotiations (see FW nos. 90, 104, 106), agreement was reached on 20 September 2006 between the European Parliament, the Council and the Commission concerning the Development Co-operation Instrument (DCI) – a legal instrument which is to underpin EC co-operation with developing countries. The European Parliament’s Development Committee has succeeded in incorporating binding commitments that now provide a solid basis for ensuring that future EC aid focuses on tackling poverty within the context of sustainable development. The agreement will be formally adopted in the coming weeks and take effect early in 2007.

New book exposes flaws of carbon trading

A new book, Carbon Trading: Critical conversations on climate change, privatisation and power,¹ published this week by Sweden’s Dag Hammarskjold Foundation together with the international Durban Group for Climate Justice and the UK-based NGO The Corner House, exposes how carbon trading dispossesses local people in the South of their lands and futures without resulting in significant progress toward alternative energy systems either in the South or North.

The book analyses the history of carbon trading and the lessons that should have been learned from US pollution trading models; explains the differences and similarities between emissions trading and carbon ‘offset’ trading; includes eight case studies of carbon ‘offset’ projects gone wrong; explains the wider-reaching problems with carbon ‘offsets’ which go beyond individual project disasters; and ends with a chapter outlining many of the tried, tested and functioning alternatives to carbon trading.

Although, at 360 pages long, it is certainly not a quick read, the book captures the reader’s attention by presenting the analysis as a conversation between two people with different views on the merits or otherwise of carbon trading.

1 Printed copies will be available from November; contact jutta@fern.org. Download available at: www. sinkswatch.org

EPA objections

As the second phase of negotiations for the Economic Partnership Agreements (EPAs) between the EU and ACP countries has kicked off, resistance to the EPAs seems to be growing in a number of ACP countries. The Nigeria Trade Network has warned that opening up markets would threaten jobs and undermine regional integration, stating: ‘we owe ourselves the responsibility not to sell the future of tomorrow’s generations, for it is better to delay the negotiations than to sign a bad deal and call on the EU to drop the reciprocity of the agreement.’ New research in Mauritania seems to indicate that an EPA can lead to a reduction in domestic production of 24 per cent and a fall in employment of 12 per cent; and the Pacific Islands have put out a press release listing ten reasons to challenge the Pacific EPA. To top this off, groups in Kenya have asked their government not to sign any agreement and to call on the EU to use the formal review process over the coming month to redirect negotiations onto a different path.

What all these objections seem to agree on is that the EPA path should at least allow ACP countries to continue to earn revenue from taxes, should prioritise regional integration, and should allow ACP countries not to open up their markets when this will have clear negative social and economic impacts. If the EU heeds its own EPA sustainability impact assessments (SIAs), it should take account of these concerns and suggestions, as the SIAs clearly highlight the weakness of consultation processes to date.

NEWS IN BRIEF

WB report: From the recent press release announcing the World Bank’s new report on illegal logging, it appears that the Bank has taken note of CIFOR’s report Justice in the Forest,¹ since the World Bank’s Gerhard Dieterle is quoted as saying: ‘Illegal logging can be “need-based” for subsistence, or “greed-based” for profit. Unfortunately, forest crimes often go without punishment and, in the few instances where there are prosecutions, the poor are often targeted. Forest laws must be reformed to recognize the needs of the forest-dependent poor. Otherwise, their enforcement is the worst form of violation of equity and justice.’ There is, therefore, still hope for the various FLEG processes.

1 http://www.cifor.cgiar.org/publications/pdf_files/Books/BColchester0601.pdf#search=%22Justice%20in%20the%20forests%20site%20%2B%20cifor%22

Liberian VPA? A relatively ‘new’ candidate for a VPA might be Liberia. The UN Security Council decided in June 2006 to lift timber sanctions once a new forestry law had been passed in Liberia. Such a law was adopted on 19 September 2006. However, it has been criticised by a number of both Liberian and European NGOs¹ as failing to adequately address community land tenure, access and user rights; meaningful public participation in forest management; and sector reform. Although a VPA could provide an opening to address these issues, this will only be the case if the negotiators put forest governance to the fore, and not the legitimisation of trade. In its report of 25 May 2006, the UN Panel of Experts on Liberia mentions that: ‘The UK has requested that the EC codify such an agreement [to only purchase legal timber] through a VPA with Liberia’. The good news is that China, as a major possible importer of Liberian timber, has indicated its willingness to join such an agreement.²

1 See: Open letter to the Liberian Government at www.fern.org

2 Letter dated 25 May 2006 from the Panel of Experts on Liberia addressed to the Chairman of the Security Council Committee established pursuant to resolution 1521 (2003).

Ilisu report: A new FERN publication – The Ilisu Dam Project: Europe’s money would move Turkey away from the acquis communautaire – is now available at www.fern.org or as hard copy from judith@fern.org.

Forest Agenda

12–14 October: Seminars on advocacy in Liberia.

25–27 October: Seminars on advocacy in Togo.

6 November: Parliamentary Hearing on Illegal Logging. Brussels.

Mid-November (no date yet): CPET Meeting. Oxford or London.