Transcript Slide 1

Environmental Policies,
Illegal Logging, Trade and
the US Hardwood Industry
Michael S Snow
Executive Director
American Hardwood Export Council
www.ahec.org
www.sustainablehardwoods.info
Presentation Structure
• What is driving the “green procurement”
movement for wood products around the globe
– Environmental concerns about wood:
– Tropical deforestation
– Illegal logging
• Policy responses:
– Forest certification
– Green building policies
– Procurement policies
• Towards a comprehensive solution
– The need for risk assessment and science-based
policies
Growing Importance of US
Hardwood Exports:
Exports as a % of US Production
Source: Hardwood Review,
Drivers of Environmental
Policies:
The European Perspective
www.ahec.org
www.sustainablehardwoods.info
Population growth
Illegal Logging
• Illegal material
depresses world
prices for wood by up
to16%
• Severely undermines
markets for legal
operators
• Undermines
reputation of the
wood industry
Driving force 1: international
political processes
•EU Forest Law Enforcement and
Trade Action Plan
•Voluntary bilateral agreements with
producing countries, mainly in the
tropics
•Legality licensing procedures for
log, lumber, plywood, veneer imports
•Recommendation that EU
governments adopt timber
procurement policies
•Support for private sector initiatives
Driving Force 2: ENGOs
•Greenpeace targeting use of
wood from “illegal sources” in
high profile public sector
construction projects
•European Commission Offices,
UK Government Cabinet Offices,
Buckingham Palace.
•WWF working with green party
and other political allies in
European and National
Parliaments to agitate for more
rapid change
Driving force 3:
EU domestic supply
• Over 60% of EU commercial forest area certified to either FSC or
PEFC
• 9000 chain of custody certificates issued in Europe.
• Rising at rate > 1000/year over last 3 years
• European hardwoods now readily available FSC or PEFC certified
with no need to pay a premium
• Availability of certified, or at least legally verified, tropical hardwoods
improving
– MTCC certified meranti can be obtained for 2-3% premium
– Leading Ghanaian shippers committed to FSC
– Major European-owned operations in Congo Basin developing legality
verification procedures and committed longer term to FSC
– Gabon national certification scheme aligned with PEFC
– Indonesian producers shifting to FSC, with support from USAID
– World Bank support for certification in developing & transition countries
Driving force 4: Retail/Post
Secondary Consumption
•
•
•
•
Easiest solution to environmental problems
Reduce risks of association with illegal wood
Return on investment in chain of custody
High costs of mixing certified & uncertified stock mean
there is a big incentive to shift over 100% certified
material as supplies improve
• Trade association procurement policies
– Risk assessment of suppliers’ environmental credentials
– Favour wood from “low risk” suppliers
– Support certification as the “best tool” to demonstrate legality
and sustainability
– UK, Spain, France, Netherlands, Belgium
Policy Options:
•Boycott Wood?
•Certification?
• Public/Private Procurement Policies?
•Green Building Initiatives?
www.ahec.org
www.sustainablehardwoods.info
There is no “one size fits all
solution”
Forests not managed for timber
Certification:
A Partial Solution, but not
“the” Solution
www.ahec.org
www.sustainablehardwoods.info
Forest Stewardship Council
• Initial development led by
environmental campaigning
groups, notably WWF
• In the 1990s used as a political
tool to promote forestry activities
oriented more towards forest
protection and social welfare than
economic viability
• More recently, acquired more
support from sections of the
commercial forest sector
• Now more business oriented
approach
Late 1990s: certification diversifies
Certification challenges
Distribution of certified forest
200
180
160
140
120
100
80
60
40
20
0
MTCC
PEFC
ATFS
CSA
SFI
FSC
N.
Europe
America
Russia
S.
America
Asia
Africa
World’s Leading Hardwood
Lumber Exporters: 2008
$1,500
United States
Malaysia
$1,200
$Million
Canada
$900
Brazil
Hong Kong
$600
EU-15
Romania
$300
China
Thailand
$0
Croatia
9 00 01 02 03 04 05 06 07 08
9
19 20 20 20 20 20 20 20 20 20
Source: Global Trade Atlas
Over 70% of US timberland is
privately-owned
10%
19%
Private
National Forests
Other Public
Private
71%
Total Area = 204 Million Hectares
Private lands supply 90% of the
timber produced in the US
National Forests
4%
Other Public
6%
Private
90%
Source: Seneca Creek Estimates
Labelling challenges
Certified Forest
Certified company
Certified Forest
Certified Forest
Labelling challenges
Certified log production 300 million m3
Barrier of traceability
Limited delivery of certified products
Green Building
Schemes:
Another Partial Solution
www.ahec.org
www.sustainablehardwoods.info
Green Building Rating Systems:
LEED: Challenges for Wood
• Recyclability given more credit than renewability
• Definition of renewable too confining
• Only gives credit for “Rapidly Renewable” = less than 10
year rotation (i.e. bamboo, straw, agri-fiber)
• Encourages conversion of forests to agriculture
• Fails to recognize all credible forest certification systems
• FSC is mandatory, greatly reducing sourcing options
• Easier to chase points by using other, less
environmentally friendly materials
Wood: energy efficient
Material
Embodied
energy,
Mj/kg
AD sawn hardwood
0.5
KD sawn hardwood
2.0
Concrete
4.0
Mild steel
34.0
Plastics
90.0
Aluminium
170.0
Life Cycle Assessment
BREEAM: Good for Wood
• Heavy emphasis on energy efficiency of buildings plays
to wood’s strengths as a superior insulator
• Favours “use of materials that have less impact on the
environment taking account of the full life cycle”.
• Wood is recognised for its properties of renewability,
carbon sequestration, low embodied energy, durability,
ease of disposal
• Timber certification is not mandatory, but bonus credits
are offered where it is available
• Credits offered for all credible forest certification systems
(FSC, PEFC, CSA, SFI) based on objective assessment
of merits of each system undertaken by UK government
Green Procurement
Policies:
www.ahec.org
www.sustainablehardwoods.info
Timber procurement policies:
• Central and Local Government
procurement policies coming online in
several European and Asian countries
• Various European trade associations
implementing Codes of Conduct
• Require wood to be verified legal and
preferably from sustainable sources
Procurement Policy Limitations
• Only small percentage of illegally felled timber
enters international trade
• Markets can easily shift and divert wood to less
restrictive buyers
• Does NOT address root causes of deforestation
• Risk of widening gap between illegal and
legitimate production
Is there a better way?
YES: Risk Based Assessment
www.ahec.org
www.sustainablehardwoods.info
Perception that wood is scarce
Non-tropical forests are the main source of
timber and are increasing in size
Proportion of internationally traded
industrial roundwood by forest type
Tropical
Nontropical
A fence to the sun and back…
• During the 1990s, volume
of wood standing in
temperate and boreal
forests increased by
21,000 million m3.
• That’s enough wood to
build a 1m x 8cm fence to
the sun and back (or
7500 times round the
earth)
U.S. Hardwood Growth & Removals
Million M3
350
300
250
200
150
100
50
0
1952
1962
1970
1976
Net Growth
1986
Removals
1996
2006
US Hardwood Inventory
Billion M3
12
10
8
6
4
2
0
1953
1977
Private
1987
Nat Forests
1997
State & Local
2007
Risk Assessment:
A Sensible Approach
• Requirements established for legality verification
and certification should be based on an
objective assessment of the risk of illegal and
unsustainable forestry practices in timber
supplying regions
– To prevent imposition of unnecessary controls on
suppliers where there is little risk of poor practice
– To ensure resources are focused on problem regions
– To ensure the response is proportionate to the scale
of the problem
– To help prevent technical barriers to trade for timber
from small relatively low intensity managed forests
Goal: Reduce the Cost Spread
Legitimate Material
Cost
GOAL
Illegal Material + RISK
Source: Seneca Creek Associates, LLC
Sourcing of Non-Certified Wood
• SFI, PEFC and FSC have developed standards
for using non-certified wood:
– FSC Controlled Wood Standard
– SFI Procurement Standard
– PEFC Controversial Sourcing Standard
• CoC labeled products must meet sourcing
standards
New EU Illegal Logging
Legislative Proposal
• Requires “Due Diligence”
–
–
–
–
References to CoC removed from final proposal
Encourages risk assessment and due diligence
Only pertains to operators who “first place wood in the market”
Proportionate to the scale of the problem
• Must be passed by EU Parliament/Member
States
– ENGOs will vigorously oppose implementation
US Combat Illegal Logging Act
2008
• It is an offence within the U.S. to trade in a wood product
that has been “taken, possessed, transported, or sold” in
violation of any foreign law.
• An amendment to the U.S. Lacey Act which currently
regulates trade in fish, wildlife and limited subset of
plants.
• Burden of proof with the prosecution who would have to
demonstrate that wood derived from an illegal source
• Only likely to be applied to the worst offenders importers with actual knowledge and intent to import
illegal shipments
• Does not establish detailed requirements for legality
verification
• Actively encourages importers’ risk assessment and
greater diligence and action in regions of high risk
AHEC/Seneca Creek Risk
Assessment Findings – Low Risk
 While timber theft occurs and is of concern to private
landowners, it is not believed or perceived to be a
systemic problem, especially with regards to US
hardwood exports
 US re-exports of temperate hardwoods relatively small
and mostly sourced in Canada (similarly robust
governance)
 High regard for the rule of law, an effective
environmental, labor and public welfare regulatory
environment, and a low level of corruption
 Rights of timber ownership are well-established and
respected.
U.S. Hardwoods and AHEC
RPP Satisfy “Due
Diligence” Requirements:
• “Lacey Act” in US
• Japanese “Green Procurement”
Policy
• EU Illegal Logging Legislation
For More Information:
www.sustainablehardwoods.info