Hungary waived environmental regulations protecting native forests from logging, showing the increasingly extreme steps the government is willing to take to prepare for next winter’s energy shortages.

Prime Minister Viktor Orban's cabinet, citing the effects of the war in neighbouring Ukraine, loosened regulations on logging to meet increased demand for firewood as a result of surging gas and electricity prices.

This report by independent environmental charity Earthsight finds illegal logging in FSC-certified supply chains in Ukraine. Focussed on the Carpathian forests, it found around 100 sites are being felled illegally each spring, when silence periods should protect several endangered animal species including brown bears, wolves and Eurasian lynx. While regulations require Environmental Impact Assessments (EIAs) before sanitary felling is conducted, no EIAs were found to have been carried out. Evidence sited by Earthsight includes the Ukrainian State Environmental Inspectorate (SEI), local environmental organisations, and research commissioned by WWF Germany.

Earthsight claims this illegal logging has not been picked up in FSC audits because of systematic issues with FSC that go beyond Ukraine: conflicts of interest as auditing bodies are paid by the logging companies they certify; inadequate oversight by Assurance Services International (ASI) which should be holding the auditing bodies to account but is argued to have failed to do so. The report documents a wide array of cases where FSC-certified firms have been accused of illegal logging, clearance of High Conservation Value (HCV) forests, and human rights abuses from all over the world – including in places such as Brazil, China, Congo, Indonesia, Peru, Romania, Russia, Ukraine. Earthsight highlights that FSC has only investigated 13 companies in its 27-year history – 0.02% of the more than 44,000 it has certified.

In response, FSC states it is fully aware of the issues in Ukraine, and insists that whenever illicit acts are identified or reported they are investigated. IKEA says it has started its own investigations, commissioned audits from a 3rd-party independent audit company, asked questions to ASI, and pledges that if any illegal wood is indicated in its product it will take immediate action.

Earthsight’s report focuses on IKEA because, as the biggest buyer of wood in the world, it has the most influence to drive positive change. However, the issues found by Earthsight apply to the publishing industry as much as they do to IKEA. Therefore, the Book Chain Project will further look into Earthsight’s findings and update you as soon as we decide what further action to take.

This speech by Brian Schatz, Senator from Hawaii (D) was part of the World Economic Forum Annual Meeting held in Davos-Klosters, Switzerland, 21—24 January 2020. Seeing that half of tropical deforestation is illegal, illegal and unsustainable timber and goods are flooding global markets. Voluntary commitments cannot achieve zero-deforestation without regulation. Regulation is one of the key drivers of sustainable forestry. This year, Schatz will introduce legislation that will make it illegal for companies to import the products of illegal deforestation.

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.

A four-year investigation by the US Environmental Investigation Agency (EIA) uncovered evidence of an illegal timber trade stretching from Chinese-owned Dejia Group in West Africa to major hardware stores located across the USA.
The timber was from the okoumé tree, classed vulnerable on the IUCN Red List, with a range limited to just four African countries. US Federal officials are investigating the importers, Evergreen Hardwoods and Cornerstone Forest Products. The Dejia Group also exports to European countries where the EU Timber Regulation is in force, including France, Belgium, Italy, Spain and Greece.

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.

The first session included speakers from Carnstone, Chronicle Books, and Donnelly, who shared their understanding on forest sourcing and provided the customer perspective. Next, WWF introduced their work on increasing demand of certified and recycled paper products. IKEA also presented their forest traceability system. Then, IPE and China Water Risk provided their insights on industrial pollution and the water-use pressures present in China.

The next session focused on three major paper mills; UPM, APP and Chenming Paper, sharing their response to the growing expectations and regulations around paper manufacturing. This panel was also joined by TFT who shared their insights on how mills can develop and implement sustainable sourcing systems and encourage engagement further up the supply chain.

The certification schemes, FSC and CFCC, explained how they are evolving to ensure transparency and traceability in global forest supply chains. And the event closed with practical sessions from the Carnstone team, who guided mills and printers to get the most from the online Book Chain Project database. Printers and mills had an opportunity to ask questions, share feedback, and offer ideas and improvements for the future.

Further reading:
Speakers’ slides: https://bookchainproject.com/event?event=5
IPE’s Companies environmental performance monitoring database: http://www.ipe.org.cn/IndustryRecord/Regulatory.aspx?keycode=343j9f9ri329293r3rixxx
China Water Risk website: http://chinawaterrisk.org/
An introduction to FSC certification scheme: https://v.qq.com/x/page/g0639hql3zp.html

Hardwood Dimensions, a timber importer in the U.K., violated the EU Timber Regulation by not properly verifying the legality of a shipment of Cameroonian ayous in January 2017. A judge ordered Hardwood Dimensions to pay 4,000 pounds ($5,576) plus court costs in the case. The case calls into question the effectiveness of Forest Stewardship Council certification, which Hardwood Dimensions has held since 2000.

Following the evaluation of the effectiveness and functioning of the EUTR during its first two years of application, it was noted that the EUTR covers a significant number of timber products, but not all are included in its scope. The evaluation concluded that the European Commission may consider amending the product scope, subject to an impact assessment of options. The European Commission is therefore undertaking an impact assessment to analyse possible changes to the EUTR product scope. As part of this impact assessment process and in line with the European Commission's Better Regulation Guidelines, an extensive consultation of stakeholders is being carried out. The main aim of this public consultation is to gather views and evidence on possible changes to the EUTR product scope.

Environment secretary Michael Gove has approved emergency cash for Brexit preparations at DEFRA, after the department’s top civil servant warned that there could be “severe disruption to vital public services” without it.
Clare Moriarty, DEFRA’s permanent secretary, wrote to Gove on 18 January to request the extra funding. She requested funding for six specific projects, including £5.8m for new IT capability to enable registration and regulation of chemicals placed on the UK market. Work on this is scheduled to begin in February 2018.
DEFRA also needs £500,000 to develop a UK system to manage the quota of fluorinated gases and ozone depleting substances required under the UN Montreal Protocol. This work is scheduled to begin in March.

One subsidiary of Asia Pacific Resources International Limited (April), Riau Andalan Pulp and Paper (Rapp), has constructed a 3km canal through thick peatland on the island of Pedang, Indonesia, which has led to the suspension of their partnership with WWF and Greenpeace. The canal is built for draining peatland for pulp plantations, which is against both the company’s sustainability standards, and also government regulations. However, the president and director of Rapp insisted the action is legal based on a plan approved by the Indonesian government back in 2013, which was before the catastrophic fires of 2015.

President of Indonesia signed into law on Dec. 1, a new crucial regulation on peatland management, intending to call time on untrammelled commercial development of the archipelago’s vast peat swamp zones, which have been widely drained and dried by the palm oil and paper industries. The new regulation was praised by some observers as previously peatland development was only mandated by presidential guidelines. However, environmental pressure groups said that the new regulation may continue to trigger fires and the collapse of peat ecosystems. Greenpeace and Wetlands International say the government has not done enough to move on from destructive land use.

A new research published by the journal Conservation Letters studies the industrial palm oil plantations and regional greenhouse gas emissions levels. The paper summarizes the results of a case study focused on an oil palm operation in Gabon, and suggests that tropical African countries could largely offset the emissions created by converting the land to palm oil plantations if they enact mandatory policies regulation which forests can be cleared and how much remaining forest must be set aside for conservation. If those mandatory measures are lack, unsustainable levels of climate-warming carbon emissions could be created by converting Africa’s tropical forests into monoculture palm plantations.

The Department of Agriculture and Water Resource of Australia has decided that certified businesses are required to maintain an equivalent due diligence system under PEFC Chain of Custody standard, and also AFS (Australia’s PEFC-endorsed national forest certification system), which means that PEFC-certified companies in Australia are now recognized as automatically meeting the due diligence requirements in the illegal logging regulation of Australia, and no separate due diligence system prepared for the illegal logging regulation specifically is not required.

The EU Timber Regulation (EUTR) News have provided an update on the operation of the EU’s law to address illegal logging from March 2015 to March 2016. This issue outlines the support from the European Commission and the implementation of the regulations by its’ member states, indicating how they insure its’ proper application. Relevant publications and updates in international laws against illegal logging are also reported.

The Indonesian Trade Ministry has defended its stance on a revised regulation annulling the timber legality verification system (SVLK) requirement for exporting 15 downstream products of timber, saying that exporters are still obliged to show proof of environmentally certified material. Under the revised regulation, small to medium-sized exporters are exempted from an obligation to provide SVLK certification and are only required to provide an export declaration without an expiry date. Pulp and paper manufacturers are unlikely to be affected due to their large size. The value of Indonesia’s timber product exports to the EU went up by 8.9 percent from US$593 million in 2013 to $645.9 million last year, accounting for around 9 percent of the total export value of the country’s timber products, according to data from the FLEGT-VPA annual report.

Auditors say EU scheme to tackle $100bn global trade in illegal timber is poorly designed, badly managed and largely ineffective. Four EU countries – Greece, Spain, Hungary and Romania – have still not implemented an EU timber regulation proposed five years ago, allowing an easy passage to market for the fruits of deforestation. While on the supply side, part of the problem rests with a poor prioritisation of aid, the auditors say. Liberia received €11.9m to tackle illegal logging, when its yearly wood exports to the EU only averaged €5m.

Austrian timber company Schweighofer is linked to large-scale illegal logging which accounts for half of Romania's timber production. An EIA investigation finds that almost all the illegal timber ends up in the company's mills. Romania still has an estimated 218,000 hectares of old growth forests. A recent Romanian government study estimated that 80 million cubic meters of timber have been cut illegally in the past 20 years, representing a loss to the Romanian economy of over €5 billion. Following the report’s publication, WWF filed a complaint at the Federal Forest Office in Vienna for violations of the European Union Timber Regulation (EUTR) and calls for a full investigation of the allegations against Schweighofer.

As more than two-thirds of deforestation globally have been caused by commercial agriculture, both governments and private sectors have make many promises to tackle the problem. However, neither is likely to achieve goals by working on their own. Forest experts at Environmental Defence Fund (EDF) propose private sectors to work with REDD+ and other government initiatives, laws, and regulations as a new approach to implement forest commitments.

PEFC Italy, along with Conlegno, RiSSC, Risk Monitor and CNVP have launched a project aimed at preventing criminal organizations infiltrating into the EU timber market. The TREES project (Timber Regulation Enforcement to protect European wood Sector from criminal infiltration) aims at promoting standard procedures to prevent the risks of criminal infiltrations into the European market. By the end of the project, a standardized set of guidelines, actions and strategies to overcome difficulties in Due Diligence implementation will be developed, providing market operators with suggestions on how to carry out risk assessments and risk procedures.

British businesses from the high street and timber, construction, publishing, DIY and grocery industries are among the first UK firms committing to responsible forest trade to help end deforestation around the world with a shift to 100 per cent sustainable timber and wood products by 2020. The existing loopholes in the current legislation to combat illegal timber means some industries are exempt from ensuring that their wood or products have come from legal sources. In 2015 the timber regulation is due to be reviewed and WWF and its campaign supporters are calling on the UK government to demand the EU makes the necessary improvements to the regulation to ensure that all timber products are covered and thus end the import of illegal wood.

A new report by Forest Trends, a US based NGO, found out that around five football fields of tropical forest have been illegally cleared every minute between 2000 and 2012, which losses have been driven by consumer demand for beef, leather and timber in Europe and US. The values of this trade in commodities including timber, leather, beef, soy and palm oil, accounting for $61bn a year. The majority of the illegal deforestation for commercial agriculture has been in Brazil and Indonesia. The local governments are lack of capacity to enforce laws to against illegal logging. Report found that licences and permits to cut the trees are often acquired through corruption. Authors believe that consumer countries in EU could have done more to tackle the problem. Strong regulations rather than voluntary actions is the better solution. The biggest concern for campaigners now is the spread of illegal deforestation to new countries in Latin America, Africa and Asia.

WWF is urging the European Commission to use the results of the recent surveys on implementation of the EU Timber Regulations to put more pressure on national governments and take legal action against non-compliant countries. WWF’s EU Government barometer shows that only 11 EU countries have so far adopted national legislation and procedures considered robust enough to control the legality of timber and timber products, thus leaving 17 without robust legislation. The most recent EU survey on implementation highlights Hungary, Poland, Spain, Malta, France, Greece and Italy as being among the countries failing to fully implement the regulations.

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.

The Indonesian Government is considering the viability of creating a voluntary partnership agreement (VPA) on timber trade with Australia to boost exports of forestry products. The VPA with Australia would be similar to the VPA between Indonesia and Europe: Under the EU-Indonesia VPA, all timber and timber products certified by the domestic timber legality verification system (SVLK) are considered legally harvested and in compliance with the EU’s timber regulation.

A recent study in Nature Climate Change suggests that the rate of Deforestation in Indonesia is twice what is reported by the Government and that the Government’s 2011 regulations to combat deforestation have been largely ineffective. The report cites a Science report on the disparity between deforestation rates reported by the Indonesian government and the rate of deforestation calculated from satellite data. Green groups lobbying against palm oil deforestation and tropical forest loss claim the findings strengthen the argument that the Indonesian Government’s anti-deforestation legislation needs strengthening.

This article explains how FSC certification can help to increase the levels of trust in due diligence systems. FSC material is recognised as carrying a low (negligible) risk if the FSC certificate is valid; the material in question is covered by the scope of the certificate; and that there is access to the required information.

Global Witness has accused Danish timber company, DLH, of illegal timber purchases worth $305,000 in 2012. The investigation showed that the timber was felled using outdated permits that were deemed illegal in Liberia because of widespread misuse, fraud and corruption. These accusations put DLH in breach of its FSC certification, and any further imports of this kind would make the company liable to criminal sanctions under the EU Timber Regulation.

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.

Germany’s EU Timber Regulation (EUTR) competent authority, BLE, is investigating suspected breaches of the law.

BLE was apparently tipped off by its Belgian counterpart and Greenpeace about several consignments of wenge (often referred to as Congolese Rosewood) delivered via Antwerp to a number of German customers.

Greenpeace alleges that the timber comes from an illegal source in Democratic Republic of Congo and contravenes the EUTR.

One report showed a complicated supply chain with the timber being imported from the Congo to Belgium by a Swizz trader, and from there on to Germany.

The Indonesian Forest Ministry has defended the new Law on Preventing and Eradicating Forest Destruction which passed early in July. Critics point out that the new law does not mention forest fires, cuts the prescribed punishments for certain forestry crimes, and excludes mention of the protection of indigenous groups with ancestral claims and the regulation of forest boundaries. In response, proponents of the law say that it will target large-scale operators and bureaucrats who fail to uphold the law, in addition to introducing harsher deterrence methods and allowing for better coordination between law enforcement agencies.