The UK is to spearhead a major global crackdown on illegal timber and deforestation, with plans to form a coalition of developing countries against the trade as part of its hosting of crunch UN climate talks this year. All countries are expected to come forward with tougher plans to reduce global emissions as part of COP 26, and experts have said this will only happen if the UK takes the lead in forming a coalition of small and big developing countries, including forested African nations and Indonesia, as well as major economies such as the US, China, India and the EU. Offering assistance to developing countries, in the form of finance and technical expertise, will be vital to that effort.

China, the world’s largest timber importer, issued a new draft of its first Forest Law update in 20 years that adds a prohibition on buying illegally sourced timber. It will be effective on 01 July 2020. Issues around enforcement, such as the burden of proof being on government departments, traders being out of scope, and low penalties, remain.
Please find more details about the law here. (EH&CH)
P.S. Recently, we attended an APEC region workshop hosted by APEC Expert Group on Illegal Logging and Associated Trade (EGILAT) in Malaysia on forest law governance. This table captures the major and emerging forest law regulations in the region.

Around 150 Yong’an residents are suing the local government and its partner forest management company, Guangxi Lee & Man Forestry Technology Ltd, for violating a clause in contract law where a business must not damage public interests. Villagers claim the eucalyptus, a thirsty plantation species, is draining the local water supply from three mountain springs, leaving very little for farming and domestic use in the village. This is the first case of this kind in China.

The World Economic Forum recently published research suggesting consumers in a few key emerging market producer countries (Indonesia and Brazil) and importing countries (China and India) together account for 40% of global consumption of the four commodities most associated with tropical deforestation—soy, beef, palm, and wood products. The authors project that by 2025 demand for these commodities within these four countries could increase by 43%, resulting in forest areas equivalent to the size of Nigeria being cut down every. Increasing demand for meat and calorie-rich foods, regulatory changes, and shifts in constraints for domestic production will all be key factors in fueling demand in these emerging market economies.

The publishing initiative run by Carnstone, The Book Chain Project, held its second Asia Summit on 24th of April in Shenzhen, China. It was an opportunity for all the stakeholders in the paper and pulp industry to get together to discuss the latest developments in responsible fibre sourcing. Among the 70 delegates there were paper mills, printers, publishers, retailers, timber experts, and NGOs. The aim of the Summit was to discuss the latest developments on responsible forest sourcing and to share best practice. Further reading and speakers’ slides: https://bookchainproject.com/news

The Summit is going to take place on Tuesday 24th April 2018, which brings together organisations across the pulp, paper and publishing supply chain. The Summit will focus on learning about the latest developments in responsible forest sourcing, and an opportunity to share practical advice for paper makers on sourcing fibre responsibly. A wide range of attendees including paper mills from across Asia, participating publishers of Book Chain, NGO’s, representatives from certification schemes (FSC and CFCC) and technology providers will be invited. To register for the event, please sign up here.

A meeting between forestry representatives from Cameroon, Congo and China took place earlier this year, aimed at strengthening legality within the forestry sector and the international trade in timber. Participants agreed on the development of a forest control and verification system for timber from Cameroon and Congo heading to China; the need for capacity building based on a good knowledge of forest resources and monitoring tools; and the need to maintain ongoing co-operation and dialogue among stakeholders in Africa and China for more effective forest governance throughout the supply chain.

Zambian government has announced a ban on all “In Transit” timber within the country. 17 species of timber have been specified within the official Statutory Instrument, with the most notable inclusions pertaining to Pterocarpus chrysothrix (mukula)—a threatened species most commonly sourced in the Democratic Republic of Congo (DRC). The decision addresses ongoing international concerns that the country is being exploited by smuggling networks to transport timber to lucrative markets overseas, with primary destinations including China and Vietnam.

China has completely banned the felling of natural forests for commercial purposes, according to the State Forestry Administration (SFA). China had previously made a three-step plan to phase out deforestation, starting with the worst deforested areas and setting the end of 2017 as the deadline for a complete national halt on deforestation. China will step up efforts to plan and establish 20 national forest reserves in seven key areas, in hopes of reducing the country's dependence on timber imports to less than 30 percent by 2030.

Myanmar’s National League for Democracy-led Government announced a national logging ban, effective immediately, which will run until the end of March 2017. Satellite data shows the tree cover in Myanmar has lost nearly 5 percent (2 million hectares) from 2001 through 2014. In 2014, Myanmar enacted a ban on raw timber exports. A driving force of Myanmar’s illegal timber trade is demand from China, and Myanmar was once China’s biggest supplier of rosewood in 2013. The demand from china declined in 2015 since China’s economy slowed, and currently, China’s timber trade with Myanmar is officially suspended.

Fern have produced a report outlining China’s efforts in combatting the trade of illegally sourced timber. The report covers the forest policies and timber trade trends in China as well as the engagement from national and international bodies. Strategies for China-EU efforts in tackling illegal logging and forest governance failure and other drivers of deforestation are also shared. One recommendation includes a robust enforcement of the EUTR in imports from China.

According to satellite data analysed by researchers at Michigan State University, tree cover increased significantly on about 1.6% of China’s territory between 2000 and 2010, while tree cover dropped on only 0.38% of China’s land. The researchers attributed the forest gain to China’s Natural Forest Conservation Program, which has banned logging in many of the country’s forests and set up systems to prosecute illegal logging. The NFCP also compensates businesses and households for monitoring forest health and conserving trees rather than cutting them down.

China is planning to ban commercial logging in all natural forests by the end of 2016. This is an extension of a program which commenced in 1998 with a purpose to allow forests to recover from decades of over-logging and to help restore forest ecosystems and their resilience. This brief explores some of the anticipated economic and ecological implications of the forthcoming expansion of restrictions on commercial logging in China’s natural forests.

China, which logs about 49.94 million cubic meters of natural forest each year, initiated a landmark pilot program to ban all commercial logging of natural forests in key forest zones in Northeast China's Heilongjiang Province in April 2014. Now the country will implement a ban on commercial logging of State-owned natural forests by end 2016.

The article points out that over 50% of the timber China consumes and processes comes from imports much of it thought to be from illegally harvested sources. There is a concern that this domestic logging ban may lead to an increase in those illegally harvested sources.

Environmental Investigation Agency, London-based, released a report saying that an alarming escalation of timber flowing into China has been there over the last three years. The majority of trees being cut down was driven by very wealthy Chinese people, who consider luxury products as a status symbol. 153 Chinese nationals were arrested for illegal logging in Myanmar, but were released in July after receiving a presidential pardon.

Regions along the porous Myanmar-China border have been a source of smuggled illegal timber to satisfy the growing demand from Chinese industry. Stripping natural resources in this way has prompted some resentment in Myanmar towards its more prosperous neighbour, and China has since protested at the harsh sentence. The border regions, which include Kachin state, have seen higher levels of conflict since 2011 between the Myanmar government and Kachin separatists. This escalation may provide sufficient cover for the illegal logging activity to take place.

32 indigenous villagers in Cambodia’s north-eastern area, Stung Treng province, called on local forestry officials to crackdown on illegal saw mills and to provide them with protection after they received death threats from unsanctioned loggers of luxury timber. The 32 villagers are community activists, and they vowed to keep fighting illegal logging in their local area despite the threats. The environmental watchdog Global Witness said in a report in February that China’s voracious demand for luxury furniture is the driver behind the multimillion-dollar illegal trade in rosewood in Cambodia.

Russia’s Federal Security Service (FSB) is working with environmentalists to combat illegal logging in the country’s Far East. Activists from WWF described long term collaboration with officials from Russia’s former KGB service in the effort to combat corruption and illegal timber exports as “unusual” but also unavoidable. WWF has been providing training for local customs officials on how to spot illegal species. A 2013 report by the Environmental Investigation Agency estimated that 96% of the valuable hardwoods harvested in the Russian Far East end up in China, while at least 80% of all felled trees have been logged illegally.

China's Heilongjiang province, which borders Russia to its north and east, contains 18.5 million hectares of state forest - more natural forest than any other province in the country. However, since the mid-twentieth century, Heilongjiang has had over 600 million cubic meters of timber extracted from its woodlands. Now, China is trying out a complete ban on commercial logging in the province's state-owned forests. Forestry experts predict that this trial ban will allow forests to regenerate hence, replenishing timber supplies, but will also push the industry to focus on improved forest management. According to the State Forestry Administration, to ensure that the ban is enforced and implemented over its intended time frame, the central Chinese government has allocated 2.35 billion yuan ($375 million) per year to cover forestry workers’ living costs between 2014 and 2020. If the ban succeeds, it could be extended throughout northeastern China and Inner Mongolia.

A report published by Landesa and Rights and Resources Initiative (RRI) looks at Asia Pulp and Paper’s acquisitions of forest lands from the mid-1990s to the early 2000s in Guangxi and Yunnan provinces where it leased large blocks of collectively-owned forests for conversion to industrial eucalyptus plantations. The report finds that the principle of Free, Prior, and Informed Consent (FPIC) by local peoples was not applied in some areas, and that both APP and local regulators failed to abide by all laws governing land acquisition. The report acknowledged that APP "cooperated fully" with the researchers and is currently reviewing the problems.

China has halted commercial logging by state firms in forests in the vast north-eastern province of Heilongjiang bordering Russia, home to much of the country’s timber industry, a move experts see as a significant step to curb over-exploitation of timber. The central government has allocated 2.35bn yuan a year to cover forestry workers’ living costs between 2014 and 2020. During the last century, warfare and unrest depleted and damaged the forests. More recently, economic growth has taken a further toll. There are concerns about the long-term ecological impacts if management of the forests does not improve with the region being an important agricultural zone and concerns about deforestation disrupting rainfall patterns.

Recognising the severe impact illegal logging is having on tax revenue generation, the Lao government has launched a pilot program to track the source of timber from sawmills and wood-processing plants. Demand for the valuable hongmu (redwood) timber from neighbouring China is thought to be driving illegal logging in the country. The pilot program requires all logs in sawmills and wood-processing plants to be inspected before export and to lay a framework for documentation that they are derived from legal sources, according to the reports.

Kenya has recently seized a shipment of $13 million worth of rosewood illegally harvested in Madagascar and bound for Hong Kong. The writer highlights the trend of illegal shipments through Hong Kong and notes that as neither Hong Kong nor China has laws banning illegal timber, border authorities cannot intercept it unless it is CITES-listed. According to estimates only 16 per cent of China’s processed timber is then exported, so there is a huge domestic market that is not subject to regulations preventing the use of illegally-harvested timber.

Experts are concerned that a new export ban on raw timber from Myanmar which came into effect from 1st April could have little effect due to a lack of clarity from the government on how the ban would work in practice and the effects of the ongoing conflict in Kachin state in the north of the country which borders China. NGO EcoDev claims that very little of the timber that crosses the border into China is actually sourced in border areas where the government are fighting the Kachin Independence Army on the pretext of cracking down on illegal logging. Field research has found that many of the logs actually come from government-controlled areas suggesting collusion between the authorities and the rebels. They also note that it is very hard to track the chain of custody of logs to determine their legality as so much comes from the deep jungle.

Monks and villagers in Ubon Ratchathani’s Khemmarat district of Thailand have teamed up to protect their 100-year old Siamese rosewood forest from illegal logging gangs. The rosewood trees in this area have grown naturally for 100 years, and most are more than six metres high. By closing the temple doors during the night, the monks are preventing illegal logging gangs from entering the temple and cutting down the trees. Most illegally cut rosewood trees are transferred to China via Laos and Vietnam. During 2008 – 2014, over 27,000 pieces of Siamese rosewood have been confiscated by police and some 395 offenders arrested.

The pattern of overseas investment and cooperation by Chinese timber enterprises is evolving rapidly. Chinese forestry enterprises have invested around US$1.3 billion in some 20 countries mainly for timber harvesting, primary processing as well as a growing interest in wood product manufacturing.

The China Forest Certification Scheme (CFCS) has been endorsed by the PEFC General Assembly. There are already about 2 million hectares of forests in China CFCS-certified, and more than 200 professionals have participated in the CFCC auditor training over the past years to be able to respond to the expected increase in demand for certification services following the endorsement by PEFC. According to PEFC’s website China is not only the largest manufacturer of forest products, they are also the ‘among the five countries with the largest forest area in the world’.

Lumber Liquidators, the top-selling flooring retailer in the US, is currently under investigation over whether it has been importing illegally logged wood products from the Russian Far East in violation of the US Lacey Act. The company is now facing class action lawsuits from investors following criticism from a noted hedge fund adviser who has argued that the recent increases in the company’s profit margins have come, in part, by increasing imports of illegally harvested wood from China and the Russian Far East.

The Myanmar Timber Merchants Association claims that illegal logging incurs costs Myanmar US$ 200m every year. The most affected areas in Myanmar are Kachin and Shan states near the Myanmar-China border as well as Kayin and Kayah states near the Myanmar-Thai border.

Myanmar’s Ministry of Commerce has revealed that US$ 17 million worth of timber was recently found to have been smuggled from Myanmar to China via illegal routes avoiding official checkpoints along the road to Muse, Myanmar's border town with China. Most of Myanmar’s trade is with China and Thailand and with Chinese import restrictions on some agricultural products from Myanmar, local exporters find it difficult to get health recommendations from China for their exports, creating a growing illegal trade.

A report from the UK- and US-based Environmental Investigation Agency (EIA) has said that up to 80% of the hardwood harvested in the Russian far east is logged illegally. The EIA say the demand for this material comes from Chinese sawmills and subsequently their western customers. The material that is of most concern is illegally logged Russian oak. US wood flooring retailer, Lumber Liquidators, was named in the report as being heavily reliant on Chinese suppliers who allegedly mainly sell illegally logged material. The EIA say the US and EU regulations on illegal logging are important pressure points where they now have the ability to intervene – before now, and without this pressure, illegal logging in Siberia has seen rapid expansion. Despite industry incentives from the Russian government, incredible demand from China has led to Chinese sawmills establishing just over the China-Russia border. EIA’s investigations suggest that most of these mills rely on a supply of illegally logged timber.

Regional instability in Myanmar has led to growing incidents of illegal timber extraction, with the products being sold in to China. There are a lack of incentives for state and regional governments to properly enforce forestry operations as they are not entitled to benefit from the resources that are legally extracted. Ministers in the Myanmar central government want to see more autonomy given to state and regional governments to encourage stronger local policing and tighter control of the country’s resources.

Four Russians have been charged with smuggling timber valued at $3m per month into neighbouring China. The four are accused of using dozens of different companies and fake documents to smuggle 150 freight cars of lumber every month. Police believe the four are part of a much larger smuggling ring. Trade across the border is driven by huge Chinese demand for raw materials, and illegal trade increased dramatically after the collapse of the Soviet Union. Illegal timber trade from Russia to China in 2011 was valued at $1.3 billion, accounting for around 10 million cubic metres of logs and sawn timber.

Russian police have busted an international group suspected of costing the state over 2 billion rubles ($60 million) through the illegal purchase and sale to China of timber, Russia’s Interior Ministry reported on Wednesday.
“It has been established that a group of Chinese citizens in Russian regions bordering China was paying cash for large volumes of illegal timber and legalizing it for export to China using documents forged by their Russian accomplices,” the ministry said in a statement.

A new WWF report warns that the Greater Mekong subregion in Southeast Asia risks losing more than a third of its natural forest cover in the next two decades at current rates of deforestation. The region, which is host to vital freshwater systems and forests depended upon by iconic species and a huge human population, is threatened by dam development, poaching and timber theft. The local governments have also given away large concessions to mining companies and plantation owners in designated protected areas.

The debate led to a disagreement between The Forest Trust (TFT) and WWF. Jason Clay from WWF US referred to FSC as a success story in halting deforestation. However, Scott Poynton from TFT, while acknowledging FSC as the strongest forest management standard, accused it of allowing illegal timber through thousands of Chinese Chain-of-Custody certified factories with the help of WWF’s GFTN programme, FSC accredited certification bodies and the FSC itself. Clay did not respond to the allegations.

The London-based Environmental Investigation Agency (EIA) has published a report accusing China, the world’s biggest importer and consumer of timber, of fuelling the trade in illegal timber with at least a tenth of imports coming from illegal sources. Over 75 per cent of China’s timber imports are processed for domestic consumer markets and are not affected by legislation in the US and EU. The EIA urges China to bring in similar legislation to ensure real progress in curbing the trade in illegal logging.

Experts are warning that the focus on Brazil, which hosts 60% of the Amazonian rainforest, is deflecting attention from increasing Amazonian deforestation in neighbouring countries such as Bolivia, Peru, Columbia and Venezuela. The main driver is considered to be the commodities boom centred on exports to China and other Asian economies. Conservation International in Bolivia say that government policies and subsidies encourage business development in the Amazon which inevitably leads to deforestation.

Washington-based NGO Rights and Resources Initiative have published a report claiming that there is a vital link between forest dwellers having rights over their land and preventing deforestation. It points to examples in China, India and Brazil where locals have had a say over how their forests are managed. Conservation groups are hoping to get land rights firmly on the agenda at the Rio 20+. The summit takes place on 20-22 June and will discuss poverty reduction, advancement of social equity and environmental protection.

Low paper prices reduce Stora Enso’s profits. Overcapacity in the European market and insufficient demand are considered to be a major factor. CEO, Jouko Karvinen, highlights the need to keep its European business strong to fund planned mill construction in China and Uruguay – regions with considerable growth.