Transcript Public Procurement Policy in Japan

Chatham House Illegal Logging Update and Stakeholder Consultation
20 July 2006
The Reform of Public Timber
Procurement in Japan
Federico Lopez-Casero
Henry Scheyvens
Kimihiko Hyakumura
Forest Conservation Project
Institute for Global Environmental Strategies
(IGES)
1
Overview
1.
Japan’s role in timber trade
2.
Japan’s response to illegal wood imports
3.
Legal and policy context of the public procurement
(PP) reform
4.
Reform of timber procurement policy
5.
Definitions and Verification Modalities
6.
Policy Implementation: a) domestic; b) imported timber
7.
Preliminary observations: a) certification / legality
verification schemes and b) addressees
8.
Conclusions
2
1. Japan’s role in timber trade
• Total timber demand in Japan is about 89 million m3 p.a., of
which roughly 80% are imported (world’s 3rd largest importer)
3rd
• Russia is now Japan’s
main log supplier:
11 million m3 in 2004
2005
2004
2003
China
largest importer of
tropical logs:
1.6 million m3 in 2004
plywood
veneer
sawnwood
logs
plywood
veneer
sawnwood
logs
JAPAN
•
Tropical timber imports (2003-2005)
UK
• Largest importer of
tropical plywood:
4.6 million m3 in 2005
plywood
veneer
sawnwood
logs
0
2000
4000
6000
8000
10000
1000 m3
Source: FRA (2005)
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2. Japan’s response to illegal wood imports
•
Since the G8 Summit in 2002, Japan has repeatedly
expressed its commitment to tackle illegal logging
•
“We will not use timber that has been produced illegally”
(Forestry Agency 31.03.2005)
•
Government stresses financial/administrative support to
international organisations and producer countries
•
Low engagement of private sector:
–
•
Only 12% of 115 firms claimed to make any effort to assess
the legality of the procured timber (survey by JFWIA)
Potential of PP reform to force a response from the
private sector:
–
Public sector: 3% of total wood procurement （estimated)
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3. Legal and policy context of PP reform
• “Green Purchasing Law”:
Law Concerning the Promotion of Procurement of Eco-Friendly
Goods and Services by the State and Other Entities of 2000
(Law No. 100/2000), enacted January 2001
• Basic Policy for the Promotion of Procurement of EcoFriendly Goods and Services:
–
Identifies specific items for public procurement
–
Revised on 1 April 2006 by including:
◦ Legality as a “criterion for evaluation”
◦ Sustainability as a “factor for consideration”
–
Refers to “Guideline for Verification on Legality and
Sustainability of Wood and Wood Products” formulated by
the Forestry Agency
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4. Reform of timber procurement policy
•
“Guideline for Verification on Legality and
Sustainability of Wood and Wood Products”:
−
Prescribes modalities to verify legality and sustainability
−
Aims to “promote verified products as appropriate items for
procurement” of the public sector
−
Is mandatory for central-level ministries/agencies, Diet,
courts and independent administrative institutions,
but also addresses local government and administration
−
Gives the suppliers a lot of leeway when verifying legality
−
Includes revision process based on multi-stakeholder
consultation (exploratory committee and working groups)
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5. Definitions and Verification Modalities
•
Legality (Criterion for evaluation):
•
•
Sustainability (Factor for consideration):
•
•
Timber “should be harvested in legal manner consistent with
procedures in the forest laws of timber producing countries”
“should be harvested from the forest under sustainable management”
3 different modalities for verification:
1. Forest certification / chain of custody
2. Codes of conduct of Japan’s wood industry
associations
3. Own procedure set up by an individual company
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(1) Verification through Forest Certification
•
Wood products certified under a forest certification
scheme
•
Accepted schemes include:
− Local scheme: Sustainable Green Ecosystem Council (SGEC)
− Overseas schemes: FSC, SFI, CSA, PEFC, LEI, MTCC
 No justification, no prior assessment
•
Very limited availability of certified timber in Japan/Asia:
− Less than 1.85 % of total forest area in Japan
(461,000 ha) in 2005
− Less than 1% of natural production forests in Asia
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(2) Verification under Codes of Conduct
of Wood Industry Associations
• The gist of this modality is voluntary codes of conduct:
− established by wood industry associations
− procedures to guarantee that their members supply wood
products verified as legal (sustainable)
− mandatory for their members (auditing, penalisation)
• Leading role of the Japan Federation of Wood Industry
Associations (JFWIA) as the umbrella organisation:
• Established code of conduct in March 2006
• It has served as a template for most other associations
• Exception: The Japan Lumber Importers’ Association
(JLIA) formulated their code in November 2005
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Verification flow under modality (2)
• The JFWIA has focused on implementation in Japan:
• explaining to stakeholders in Japan why verification is needed
• giving a domestic example for suppliers from abroad
Information brochure edited by the JFWIA
Forest Owners
Evidence doc.
Producers (Owners’ Assoc.)
Evidence doc.
Manufacturers, distributors
Government
purchasers
Invoices
Ｌｉｃｅｎｃｅ
Ａｐｐｌｙ
Certificate (invoice)
What associations
Process of licensing suppliers
have to do
Ｌｉｃｅｎｃｅ Ａｐｐｌｙ
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(3) Verification through own procedure
set up by an individual company
• Applies mainly to suppliers, which:
• are not members of wood industry associations
• prefer handling timber under own code of conduct
• Introduced at the paper industry’s urging
• To be used by chip/pulp importing businesses (?)
• No examples of implementation so far
• In principle it will work similarly to modality (2)
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Flow under Modalities (2) and (3) for JLIA members
Modality (2)
Modality (3)
DOCUMENT Segregated
Segregated
STAGES: DOCUMENT
FLOW:
Management as
FLOW:
Management:
in modality (3)
Notification
Verifiable
timber
Logging & log sales
Unvericontract
Logging notification or
fiable
(copies)
other evidence (copy)
Processing &
distribution
Invoice & (or incl.)
evidence documentation
Invoice & (or incl.)
evidence documentation
Invoice, shipping
account, received
documents & photos
Certificate based on
Delivery evidence from all
received documents
Public
Procurement
Not
procured
by gov.
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6. Policy implementation:
a) Domestic timber
• Modalities expected to work from September 2006
Number of associations involved in the implementation process
Association type
Codes of conduct Others Sum
Established
Local Timber Associations 12
Planned
for June August
16
18
46
Local Forest Owners
Associations
1
6
23
30
National Industry
Associations
11
0
4
15
Total
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22
45
91
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b) Imported timber
Main schemes with high probability of being accepted by
the government as evidence of legality:
Major exporter countries
Scheme
Indonesia
BRIK, SKSHH
Malaysia
Export Declaration, Form 2
Papua New Guinea
SGS for now; upcoming workshop
Russia
Still being developed between
JLIA & partners in Russia
Prior research required, to be
undertaken by Working Group
Re-export of manufactured
products from China

Working groups (researchers) under Exploratory Committee
for Measures against Illegal Logging investigating options
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7. Preliminary observations:
a) Certification/Legality Verification Schemes
• Modality (1):
• Government has no intention to assess certification
schemes
• Modalities (2) and (3):
• Organised by the private sector in Japan
• Key role of industry associations (especially JFWIA)
 Initial evidence of policy impact:
• National producers & environmental NGOs see new policy as
a chance to enhance demand for domestic timber
• Importers under pressure to demonstrate legality of
imported timber, as domestic timber is increasingly favoured
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b) Actors
 Main
focus on the private sector:
• Granted wide autonomy to establish their own voluntary
codes of conduct for the verification of legality
• Considered trustworthy by the Japanese government
 Prominent officials used the argument of the “Japanese
way” based on the assumption of “the goodness of human
nature” (性善説 - theory developed by Mencius [孟子])
 Less




focus on the public procurer:
Expected to accept provided documentation for legality
verification in accordance with one of the modalities
No independent government/ 3rd party verification required
No major capacity building efforts or advice intended
However, public procurer is free to pay a price premium
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8. Conclusions
• Stepwise approach:
– Priority of legality over sustainability
– Need for studies, and for negotiations of private sector
and government with counterparts in producer countries
– So far, a paper trail is being implemented
• A major shortcoming is a lacking 3rd party auditing
• Remaining questions:
– Will the private sector suppliers prove worthy of the trust
the government has put in them?
– How reliable will the schemes for verification of legality
negotiated with the major producer countries be?
Thank you!
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