Promoting Cooperation in the Asia-Pacific Region to Reduce the Trade in Illegal Wood Products

by

Dr. Nigel Sizer, Director
Asia-Pacific Forests Program
The Nature Conservancy
 

Slide 1: Overview of Presentation

• Customs Cooperation Workplan and Initial Study
• Findings of the Study
• Conclusions
• Next steps for AFP

Slide 2: Why illegal logging is a priority issue for AFP

• Lost Government Revenues
• Market Access and Competitiveness
• Social Conflicts
• Environmental Damage
• Watershed harm and sedimentation
• Fires
• Floods
• Shared Responsibilities

Slide 3: AFP Customs Cooperation Workplan

• Promoting Cooperation among Customs Agencies and Others in the Asia-Pacific Region to Reduce the Trade in Illegal Wood Products
• Analysis of Initial Options

NB. Work in progress, findings preliminary

Slide 4 Key Objectives

• Identify steps importing countries can take with existing laws to prevent import of illegal wood
• What minimal changes could be made to enable prevention of import where means do not exist now
• Assess possible regional cooperation or bilateral initiatives and options for these

Slide 5: Import Countries Studied

• China (and Hong Kong)
• Japan
• Korea

• Malaysia
• Singapore
• Thailand
• Vietnam

Slide 6: Broad legal context

• Laws already exist to tackle:
• Bribery and corruption
• Smuggling
• Money laundering
• Forgery
• Fraud
• Dealing in stolen goods
• Trade in endangered species
• These laws could be used more actively to combat illegal logging and associated trade

Slide 7: China

• No follow up to Indonesia-China MOU
• Wood smuggled without paperwork is strictly illegal: corruption issue
• CITES... but very few timber species covered
• Phytosanitary rules clear: wood must have a valid certificate
• Need for effective bilateral cooperation on implementation with major exporters (Indonesia, Russia) at customs agencies level
• Initiative must come from exporters
   

Slide 8: China - Hong Kong

• Free port, very little regulation of trade except for "prohibited articles" under Chapter 60
• CITES not implemented effectively
• Study unclear about phytosanitary controls???

Slide 9: Japan

• No serious smuggling problem, but wood laundered through 3rd countries
• Otherwise generally seems to be similar to Chinese situation
• Stronger bilateral cooperation with exporting countries needed building on joint statement and commitment

Slide 10: South Korea

• Plant quarantine rules exempt timber products
• Appears to be very little restriction
• CITES enforced to come extent
• Legal reform would be slow
• Recommend bilateral cooperation with exporting countries
• Exporting countries can request help from Korea International Cooperation Agency (KOICA)

Slide 11: Malaysia

• Regulations strengthened with greater penalties for trade in illegal wood
• Bans imports from Indonesia of logs and large dimension solid wood
• CITES applies
• Rules do not apply to Free Trade Zones where inspection difficult・fforts being made here
• Corruption an issue with smuggling
• More bilateral effort with Indonesia recommended for joint inspection and information sharing

Slide 12: Singapore

• Transshipment reducing
• Financing, insurance, marketing increasing
• CITES applies
• No specific regulation to prevent import of illegal wood
• Again, recommend exporters take lead and seek cooperation, information sharing
• Likely to be supportive of ASEAN-based initiative

Slide 13: Thailand

• Logs or wood without proper documentation can be impounded and penalties charged
• Exporting customs documents, payment of duties, origination documents must be in order
• CITES applies, problems with implementation
• Implementation problems, corruption
• Customs laws could be made more detailed
• Recommend lead from exporter side requesting changes and bilateral cooperation

Slide 14: Vietnam

• Laws unclear and dynamic
• Customs and tax laws seem to prohibit import of illegal wood, but there are loopholes
• Corruption a serious problem for enforcement

Slide 15: Export Country (focus on Indonesia)

• Difficulties with enforcement (<1% illegal wood exports interdicted recently)
• Attempts to involve the region, MOUs, FLEG etc
• Effort to change the situation

Slide 16: Export Country

• 5/6 of illegal Indonesian timber is not smuggled, but exported from Indonesia's timber mills in the form of processed timber with paperwork
• Only 1/6 is smuggled without paperwork

But... quite good data exists (e.g. BRIK database) with which to strengthen export permit process given some strengthening of the database
 

Slide 17: Implementation issues

• Defining legal and illegal in the exporting countries is key -- importing nations -- laws should respect definitions set out by exporters
• Border controls not adequate:
• Issuance of permits by exporter, falsification of permits, permit validation by importer customs
• Protocols for information exchange about suspect shipments not present
• Low awareness among enforcement officials in some countries or ports

Slide 18: Conclusions

• Bilateral and regional cooperation between customs agencies encouraged by exporting countries could be strategic, relatively low cost, and effective
• Identification of illegal products needs to be strengthened, led by exporting countries
• Legal framework needs to be strengthened in some countries to take action based on better identification of illegal products

Slide 19: Priority next steps for AFP

• Complete analysis to identify legal measures needed in some importing countries - ongoing and funded
• Help key exporting countries to strengthen definition, documentation, and information about legal vs. illegal wood (build on AFP workplan on standards of legality and wood tracking -- funded)

Slide 20: Priority next steps for AFP

• Prioritize some important bilateral relationships e.g. Cambodia-Thailand, Myanmar-China, Indonesia-Japan for special effort (build on AFP bilateral MOUs workplan and UK-Indonesia MOU workplan -- funded)
• Convene some key customs agency representatives to begin to share lessons, issues, and build partnerships

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