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How effective is the EU’s marquee policy to reduce the illegal timber trade? [1]

['Rebecca Kessler']

Date: 2024-06-19 16:16:31+00:00

The European Union’s Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan, adopted in 2003, is a unique regional attempt to rein in the burgeoning global trade in illegal timber.

A key component of FLEGT is bilateral trade agreements between the EU and timber-producing countries, known as voluntary partnership agreements (VPAs), which provide economic incentives to producer countries to strengthen regulation of timber production within their borders.

But how well do the VPAs work, and what kind of environmental, social and economic benefits do they provide? To find out, scientists reviewed the scientific research on FLEGT VPAs, and we detail their results below. The upshot, they found, is that it’s too soon to tell.

This is the ninth installment of Mongabay’s long-running special series, “Conservation Effectiveness.”

It’s extremely difficult, perhaps impossible, to determine the full extent of the illicit production and trade of timber worldwide. Illegal loggers and the shadowy networks that trade in timber outside the law aren’t exactly reporting their activities to authorities who track timber imports and exports.

But it is possible to get a sense of the scale of this trade. According to Interpol, the international crime-fighting organization, illegally harvested and traded timber accounts for an estimated 15-30% of the global timber trade and is worth $51 billion to $152 billion every year.

This represents a major loss of tax revenue for both the exporting and importing countries, but the damages go far beyond that. “Both illegal logging and the international trade in illicitly harvested timber have a serious economic, social and environmental impact,” Interpol says. “Illegal logging is responsible for deforestation, habitat loss, species extinction, and contributes to global warming.”

There are efforts to rein in this illegal global trade at many levels of government. The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), for instance, is a multilateral treaty that prohibits the trade of endangered species of plants and animals. The federal governments of the United States and Australia have adopted major legislation to stem imports of illegally harvested timber into their countries with the Lacey Act Amendments of 2008 and the Illegal Logging Prohibition Bill of 2012, respectively. Preceding both of those national efforts was the European Union’s Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan, adopted in 2003.

In addition to being the only regional policy of its kind, the FLEGT Action Plan is innovative in a number of other ways. “FLEGT is unique namely in the fact that it was a policy designed to bring all relevant parties to the table to negotiate the trade agreement,” Kate Klikis, a forests campaigner with the Environmental Investigation Agency, an NGO in the U.K., told Mongabay in an email.

The FLEGT Action Plan led to two major policies. The first is the European Union Timber Regulation (EUTR), which came into force in 2013 and bars illegally produced timber and timber products from being sold in EU markets. It’s a demand-side policy roughly analogous to the U.S. Lacey Act and the Australian Illegal Logging Prohibition Bill. The second is the FLEGT Regulation, a supply-side measure adopted in 2005 that gives the European Commission the authority to negotiate bilateral trade deals known as voluntary partnership agreements (VPAs) with non-EU timber-producing countries.

Through VPAs, the EU aims to provide economic incentives and technical support that will allow producer countries outside the EU to strengthen regulation of timber production within their borders. The EU works with these partner countries to develop timber legality assurance and certification systems that ensure timber products are produced in accordance with relevant national legislation. In exchange, producer countries can begin issuing FLEGT licenses that grant their timber exports automatic entry into EU markets.

“FLEGT licensing gave a green lane for timber to be imported into the EU in compliance with the EUTR, removing the need for EU economic operators to carry out further due diligence on imports,” Klikis said. “FLEGT was one of the first policies at the time to be truly proactive and engaging. It sought to incentivize the reform of sometimes corrupt forestry sectors of producer countries to help tackle the trade in illegal timber. It created new institutions, better enforcement and increased transparency. It facilitated meetings between government, civil society, and industry to produce solutions and to take ownership in the outcomes to the agreements.”

FLEGT has faced some serious limitations, however. Chief among them is the considerable amount of time and resources it takes to negotiate a voluntary partnership agreement and then implement a FLEGT licensing program. Even agreeing to a definition of what constitutes “legally produced timber” can be a fraught process, especially for producer countries that don’t have a robust governance structure or the resources to dedicate to the negotiation process. In fact, of the eight countries that have signed and begun implementing a VPA with the EU (Cameroon, the Central African Republic, Ghana, Honduras, Indonesia, Liberia, the Republic of Congo, and Vietnam), only Indonesia has actually begun issuing FLEGT licenses for its timber exports. Two other countries have completed negotiations and signed a VPA (Côte d’Ivoire and Guyana); and five more countries are in negotiations (the Democratic Republic of Congo, Gabon, Laos, Malaysia and Thailand).

According to a “Fitness Check” report the European Commission released in 2021, the EU and its member states had spent an estimated €1.5 billion ($1.8 billion at the time) on negotiating and implementing FLEGT VPAs since 2004. So it’s only natural to wonder: How has that investment paid off in terms of environmental, social and economic benefits? To find out, we turned to the scientific research on FLEGT VPAs in this latest installment of Mongabay’s Conservation Effectiveness series.

How we gathered and analyzed the evidence

Mongabay launched the Conservation Effectiveness series in 2017, collating the scientific evidence for how well a variety of common conservation strategies actually work, including terrestrial and marine protected areas, forest certification, and planting trees. (You can find the current databases of research for all the interventions at ConservationEffectiveness.org and Mongabay’s stories about them here.)

This is the ninth article in the series, but the first for which Mongabay’s own team of researchers did not collect and evaluate the evidence for the effectiveness of the conservation intervention in question. This time around, a team led by members of the research division of the European Forest Institute (EFI) undertook that task. The EFI is an international organization based in Bonn, Germany, that also has a policy division, which the European Commission contracted to provide various support services for the EU FLEGT Action Plan.

Lukas Giessen worked for the research arm of the EFI when he began supervising a study reviewing the scientific literature on the impacts of FLEGT VPAs that was published in the Journal of Environmental Management in November 2022. Giessen, now a professor of tropical and international forestry at the Dresden Institute of Technology (TUD) in Germany, told Mongabay that one important impetus for the study was a debate underway in the EU over the development of a deforestation-free commodities supply chain regulation that was to be largely based on lessons learned during the implementation of the FLEGT Action Plan.

“All donors, all policymakers, all scientists were interested in, ‘OK then, tell us, what did FLEGT do until now?’” he said.

To answer this question, Fredy David Polo-Villanueva, the main researcher behind the study who was at the EFI when it began and is currently a Ph.D. candidate at TUD, searched for peer-reviewed articles in two academic databases: the ISI Web of Science and Scopus. He used search terms designed to obtain a wide selection of articles on the effects of FLEGT VPAs that had been published or accepted for publication by July 31, 2020. That process yielded 170 unique articles that Polo-Villanueva and his co-authors reviewed to find the ones published in peer-reviewed journals and that reported findings on the effects of VPAs that were based on empirical evidence. That left 33 studies, all of which you can examine for yourself in the infographic below. (Conservation Effectiveness infographics are community-sourced and intended to grow as new science is produced, so more studies may be included in the future.)

The limits of the science

Giessen and Polo-Villanueva point out some important limitations to their study. A key one, Giessen said, was that questions about the effectiveness of FLEGT VPAs, while “politically en vogue and very timely,” might have come too early.

There are two lenses through which you could review FLEGT impacts, he said: “One lens is an intervention logic, what you call conservation tactics, a little bit short-term, a little bit tactical: ‘Let’s intervene and see what happens,’ and something improves or not. This is what we reviewed, this is the material that was available.”

The other lens has to do with the fact that FLEGT VPAs are, in many ways, more than just trade agreements, as they are also “kicking off governance reform processes in partly failed states,” Giessen said. “So you are talking not only forestry, logging, concessions, permissions, you are talking protected areas, you are talking environmental conservation, you are talking customs, you are talking military services [some of] who make informal income from a lot of truckloads of timber. You are talking almost the whole state apparatus.” You would need to wait another 10 to 20 years to properly assess how FLEGT VPAs have affected these kinds of slow governance reform processes, Giessen said, and these governance reforms are vital to the greater goals of the FLEGT Action Plan.

Another limitation was the fact that gray literature — that is, non-peer-reviewed reports, such as those compiled by consultants or think tanks — wasn’t included in the study even though in this case it appeared to contain some potentially useful information indicating more positive effects. And Polo-Villanueva told Mongabay he was surprised to find that most of the peer-reviewed studies included in the review, 28 of the 33, were based exclusively on qualitative data, such as survey responses or interviews with key stakeholders. Only one study used quantitative data exclusively, Polo-Villanueva said, and it was also the only one that established a control against which to measure the impacts of FLEGT VPAs: a 2018 study in Forest Policy and Economics that used trade data to compare the volume of timber exported from Cameroon to EU markets with the volume exported from a counterfactual country without a VPA.

The geographic focus of the 33 studies included in the review was also quite narrow, Polo-Villanueva and his co-authors write: “23 studies (70%) focused on one country at a time, five articles on two countries, and three articles on four or more countries.” The researchers found that the literature on the effects of VPAs was almost entirely from the seven countries that were in the implementation phase of the policy at the time they performed their review, and three (Indonesia, Ghana and Cameroon) were dominant.

With all that being said, what were the literature review’s findings about the impacts of FLEGT VPAs?

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