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Are we spending wisely?

28 March 2015

Despite austerity measures, in recent years the top donors of overseas development assistance (ODA) relative to gross national income were European countries. Funding to forest-related and biodiversity projects rose. Yet funding to agriculture has also risen – unfortunate, since half of all recent tropical deforestation is due to illegal conversion of forests for commercial agriculture.

Taking Stock: Tracking trends in European Aid for forests and communities makes an extensive study of the effectiveness and coherency of the major European donors’ policies to support programmes for forests and forest-dependent peoples. It was compiled using information from a survey of the major donors’ political and financial support to forests and communities, including that linked to agriculture and climate measures. The report examines separately aid from the EU, nine Member States, and two non-EU European nations with regard to such factors as general ODA policy; the focus and amount of forest-related ODA; programme implementation; and the impact of ODA on people and forests. It examines those governments’ Development Finance institutions, mandated to promote sustainable development through support to private sector enterprises – some of which have been involved in land-grabs and demands coherence among policies and assurance that projects contribute to halting forest loss and respecting rights.

The Power of Public Purchasing

In developed countries, direct purchasing of goods and services by public authorities and agencies accounts for an average of roughly 12 per cent of GDP. The potential to align public procurement policies with social and environmental policy goals has long been recognised, and as major consumers of forest-risk products, EU Member State Governments have the potential to affect markets in those products significantly.

The Power of Public Purchasing: Making EU Public Procurement Policy Work for People and Forests examines how procurement policies have been applied in timber procurement and to agricultural products in public catering and food. It finds that many EU governments require publicly procured timber and timber products to be sustainable, as evidenced by certification schemes (which helps to drive the market for Sustainable Forest Management (SFM)-certified timber), but miss the opportunity to encourage a market for FLEGT-licensed products. Similarly, food and catering procurement policies address concerns ranging from organic production to animal welfare, but do not address forest-risk commodities such as palm oil, beef and coffee. The Power of Public Purchasing explores the division of Member State and EU competence concerning procurement, as well as the permissibility of procurement criteria ‘based on considerations of an environmental or social nature,’ and offers targeted recommendations to Member States and the European Commission accordingly.

Is all this compatible with the WTO?

Several policy recommendations made by Fern require distinguishing, in international trade, between agricultural products that are produced sustainably and those that are not, in order to extend trade preferences to the former. But are such distinctions compatible with the WTO?

WTO Compatibility with EU Action on Deforestation asserts that, formulated with care, government policies and laws restricting imports in order to prioritise sustainable products can be compatible with the WTO. The report provides insight into how the WTO system works, fundamental principles such as non-discrimination, and derogations to the General Agreement on Tariffs and Trade necessary to protect life and conserve exhaustible natural resources. It considers the difficulty of assessing, under WTO rules, whether sustainably and unsustainably produced commodities might be viewed as ‘like’ products, and relates this to the common but possibly unfounded perception that the WTO would not permit a distinction based on processes and production methods. It concludes that trade measures intended to exclude unsustainable products could be WTO-compatible and should be accompanied by capacity-building assistance to poorer countries.

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