Tightening EU illegal logging laws

27 March 2015

The EU’s illegal logging initiatives (FLEGT and the EU Timber Regulation) have contributed, inter alia, to improvements in governance, transparency and community participation and have laid down an important foundation for tackling illegal logging. But these initiatives cannot be expected to eradicate all the other factors contributing to deforestation, including the illegal conversion of forests to land. Much timber from countries negotiating a FLEGT Voluntary Partnership Agreement (VPA) with the EU now comes from forest land cleared for agriculture and mining, and many such conversions are illegal. Whether VPAs apply to conversion timber depends on national laws and how these are included in the VPA. Catching it all: Making EU illegal logging policies work better for people and forests explores how trade in agricultural commodities undermines the important EU timber trade reforms. It recommends a course of action that extends FLEGT-like mechanisms to agricultural commodities, as well as clearly incorporating conversion timber in new VPAs and developing a broader EU action plan.

Starving damaging projects of funds

Starve a project of its money and it will be unlikely to continue. This approach is effective, but tackling them project by project is too slow; making changes in finance policy to prevent the investment in the first place would undoubtedly be more efficient. EU financial institutions provide funding to large-scale agriculture corporations that export to the EU. According to Fern’s recent analysis, 20 EU-based institutions have underwritten some USD18 billion of investment in agricultural companies, including to deforestation hotspots of Indonesia, Brazil and Malaysia.

Clear Cut: The case for making EU financial institutions work for people and forests examines the activities of different financial institutions and their involvement in forest-risk agriculture. It investigates specific voluntary policies intended to address environmental, social and governance issues and the problems that arise with such measures (e.g. lack of public oversight and inability to enforce). The report examines the financial context in which investment takes place, and the factors that have contributed to an ‘agricultural gold rush.’ Finally, Clear Cut explores options for EU-based financial institutions to limit their role in funding and facilitating agricultural projects that destroy forests, often illegally, and that violate local peoples’ tenure rights. It suggests undertaking in-depth research focused on banks and private equity to better understand that role, strengthening existing EU financial rules and introducing new regulation that targets investment in destructive commercial agriculture.

Shopping duty free?

In the decades following World War II, much of international trade negotiations have centred on reducing tariffs – customs duties on imports or exports – and removing other trade restrictions. This process has been less extensive with regard to agricultural products, given the political power of agricultural players in many countries. The EU offers World Trade Organisation (WTO)-permissible preferential access to products of developing countries, yet under the EU’s latest Generalised System of Preferences, many countries no longer qualify.

Duty Free? Making EU TariffsWork for People and Forests asks whether the EU can set lower tariffs for products identified as sustainably produced. The report raises issues surrounding the practical implications of doing so, such as WTO applicability and political acceptability, as well as how the design of such measures should be approached (for instance, so as not to unduly affect the exports of the poorer countries, in a participatory manner). It recommends that the EU explore lowering import tariffs for sustainably produced agricultural commodities.

Forests shouldn’t distract from fighting fossil fuels first

Forest loss contributes to climate change, and figures prominently in international climate change negotiations. Focus on Reduced Emissions from Deforestation and Forest Degradation (REDD+) has raised the profile of deforestation’s impact on the climate, but this has also detracted attention from the need to reduce fossil fuel emissions in industry and energy.

Fighting Fossil Fuels First: Making EU climate policy work for people and forests shows that greenhouse gas emissions must be reduced by some 85 - 95 per cent by 2050 or many forests and other ecosystems will be lost through die-back due to increased temperatures. This study refocuses attention on the need to reduce greenhouse gas emissions domestically, without offloading responsibilities onto other countries through offsets. It explores why forests cannot offset fossil fuel emissions and recommends reorienting EU finance currently earmarked for forests more effectively to improve governance and enhance tenure rights.

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