13 October 2017 | In the past 12 months, Japan, the Republic of Korea, China, Vietnam, Indonesia, and Malaysia have all taken steps to develop import regulations designed to keep illegally logged timber out of their markets. In most cases, timber import regulations give governments the power to penalize companies that trade in illegal timber. The new Asian regulations – when operational – will join the US, EU, and Australia which have similar legislation already in place, and together, have the potential to create a significant global market incentive for companies to only trade in legal timber.
A recent Forest Trends report presents a snapshot of these rapidly evolving policies and regulations as well as analyzing the likely impacts on global markets.
These developments are significant because in 2016, the six Asian countries represented almost 40 percent of the global market share of timber imports (up from 22 percent in 2009). Combined with the US, EU, and Australia, these markets covered over 90 percent of global timber imports in 2016.
With a growing number of global timber products manufactured in major hubs such as Vietnam, the provisions set out in the new Asian regulations promote transparency and are being designed to help manufacturers meet the requirements of the timber regulations already in place in major consumer markets such as Europe, the US, and Australia.
The new Forest Trends report analyzes how the regulations will operate in each country including:
- Expectations of due diligence from companies;
- Scope of the legislation, including which products and companies along the supply chain are covered; and
- Checks, enforcement, and penalties for non-compliance.
Forest Trends’ findings:
- Legislative developments are moving fast, making it difficult to always have a clear picture of the latest provisions, and this can be compounded by translations of complex legal terms.
- Most of the Asian countries have defined the actors and timber products covered, as well as the expectations of how companies should comply with the timber regulation.
- All of the Asian regulations encourage regulated companies to take active steps and initiate due diligence systems that reduce the risk of illegal timber entering the market. The new Asian laws generally follow the precedent set by the EU Timber Regulation and the Australian Illegal Logging Prohibition Act.
- Enforcement approaches are not yet clear in the Asian import regulations, with only a few setting out defined penalties for violating the law.
- Regardless of the legal precedent followed, in both the EU and USA, robust, pro-active implementation has been critical to eliminating the trade in illegal timber. In the EU, for example, enforcement since 2013 has involved systematic checks on companies to ensure that they are complying with the regulations, and, increasingly, the use of penalties when there is evidence of non-compliance. Initial EUTR cases demonstrate that companies are being given time to justify or improve their systems, often accompanied by an injunction on sales of specific products until improvements have been made. The extended enforcement timeframes sometimes frustrate NGOs in the EU, but they allow prosecutors to justify sanctions when companies ultimately fail and support companies that try to improve.
The six Asian countries developing import regulations join at least 30 other states (the 28 Member States of the EU, the United States, and Australia) in regulating the trade in illegal timber. They have the potential to create a strong global market incentive for companies to only trade in legal timber. While the six countries are at different stages in the development and implementation of their timber import regulations, technical harmonization and robust, pro-active enforcement will be critical for their long-term success in eliminating the trade in illegal timber and protecting forests.