Illegal Logging and Related Timber Trade - Dimensions, Drivers, Impacts and Responses: A Global Scientific Rapid Response Assessment Report

7 GLOBAL GOVERNANCE APPROACHES TOADDRESSING ILLEGAL LOGGING: UPTAKE AND LESSONS LEARNT

the Regulation however, remain the responsibility of each Member State (Schwer and Sotirov, 2014). In a similar vein, in 2012, the Australian Senate passed the “Illegal Logging Prohibition Act” (ILPA). The legis- lation aligns with EU and US legislation in prohibiting the placing of illegally-logged timber, or products made from such timber, onto the market. This covers both im- ported and local Australian timber. Like the EU Timber Regulation, the Act imposes due diligence obligations on importers and traders, which were defined in the 2014 Illegal Logging Prohibition Regulation. The Act is simi- lar to the Lacey Act, and different from the EU Timber Regulation, in not accepting a CITES permit as proof of legality, although such permits may be used to support a due diligence case. There were, however, notable differences in the types of domestic coalitions that emerged to support these poli- cies. In the EU initially, environmental groups targeted domestic economic operators, traders and retailers by asserting that many of their imported wood products originated from illegal logging crimes in foreign coun- tries. In response, traders and retailers eventually united with environmental groups to support the EUTR as a way to weed out illegal timber (Sotirov, 2014; Sotirov et al., 2015). This coalition also argued that by reducing in- ternational imports, the EUTR could also be seen as an important industrial development policy within the EU (Sotirov et al., 2015). In contrast to the United States, European domestic tim- ber producers, along with exporters from forest-rich EU Member States including Austria, Germany, Finland and Sweden were generally opposed to the EUTR. They feared, just as US producers had feared a decade before, that regu- latory changes might result in their own domestic practices becoming a target (Sotirov, 2014). Unlike the US – where producers and NGOs worked out a collective effort to em- phasize illegal logging as an external problem that origi- nated abroad – EU producers had yet to be assuaged. In part for these reasons, producers identified technical and practical implementation, as well as WTO rules, in their unsuccessful efforts to reverse the EUTR decision (Leipold et al., 2016; Sotirov, 2014; Sotirov et al., 2015). Given that individual countries decided whether, and how, to implement the EUTR, it is also important to note divergent uptake/implementation within Member countries (Sotirov et al., 2015). In general, scholars have found weak implementation within poorer Eastern European countries such as Bulgaria and Romania (Gavrilut et al., 2015) as well as in Southern Europe, particularly in Greece, Italy and Spain (Sotirov et al., 2015). Other scholars have found increasing coordination between EUTR implementation and FLEGTVPA processes, owing for example to the crea- tion of the European Commission’s EUTR/FLEGT Expert Group, an informal enforcement network convened by EU Member State Competent Authorities, and the Timber Reg- ulation Enforcement Exchange (TREE) network organized by Forest Trends, which brings together environmental

Office furniture made from rosewood (China) Photo © Jianbang Gan

NGOs and law enforcement authorities from the EU, US, Australia and INTERPOL concerned with illegal logging (Overdevest and Zeitlin, 2016). 7.4.2 Middle of Supply Chain Countries 3 The first formal approach from China to address legality verification occurred following the G8 Forestry Action Programme, which ended in 2002, (Toyne et al., 2002) and the “Bali Action Plan” on illegal logging. The Chinese State Forestry Administration (SFA), which has respon- sibility for developing domestic and international forest policy commitments, recognized the need for some type of policy response. First, the SFA declared that illegal log- ging was not a problem within China, but rather concerned challenges in other countries such as Indonesia. Second, to assuage concerns, the SFA signed a 2002 memorandum of understanding (MoU) with Indonesia designed to reduce illegal exports through information exchanges (Hurd and Simorangklr, 2011). Third, despite evidence to the contrary (Chrystanto, 2004), the SFA also provided assurances that its current systems ensured that tropical imports coming into China were legal. However, the MoU was generally viewed as a “paper exercise” with few observable effects in either country (Tacconi et al., 2004). No formal efforts were made to change internal policies governing legality verification. Beginning in2008, China changed course by formalizing anation-wide approach to legalityverification.Thehallmark of this effort was the development of theChineseTimber Le- gality Verification System, formally launched in December 2009.This system, implementationofwhichwouldcontinue throughout 2010, draws onChina’s extensivepermitting sys- tems to establish chain of custody for all legally verified forest products within the Chinese forestry sector (Sun and

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3 The section draws on Cashore and Stone (2014).