Ghana & the VPA Chatham House Illegal Logging Update and Stakeholder Consultation, July, 2006 Let me first and foremost extend my sincere gratitude to the organisers and DFID for making it possible for me to here today to share our thoughts with you as part of the consultative process for addressing issues related to illegal logging and SFM. My presentation is a Joint paper developed with Chris Beeko the Coordinator of Ghana’s Validation of Legal Timber Programme (VLTP). I am informed I have ten minutes and it is my intention to focus on the key issues but hope I will be able to generate sufficient controversy to allow for discussions and fruitful exchange of views that can enhance our process for the Voluntary Partnership agreement. By Alhassan Attah & Chris Beeko

This is to show the location of Ghana in Africa This is to show the location of Ghana in Africa. Those of you who followed the world cup last month you will recall the country that sold a new brand of football. Able to create chances but unable to score. There are parallels in forest governance in Ghana.

Structure of Presentation Ghana’s Perception of initiative The Preparatory Process so Far The Challenges Lessons Learnt Some Reflections & Recommendations The presentation this afternoon will state Ghana’s perception of the VPA from the point of view of the public agencies and government, detail Ghana’s preparations and activities towards entering into the VPA, discuss Ghana’s road map for the VPA, highlight challenges to the VPA process for Ghana, indicate lessons learnt to share our experiences with participants and other countries that may wish to embark on the road to VPA’s and finally make recommendations for consideration by participants.

Ghana’s Perception The VPA can assist in moving forward governance reforms if it is rightly approached The VPA could have wide ranging impacts and must therefore not be narrowed down to negotiating legality definitions and systems of verification A well informed long-term programme support is required to establish a legality regime and implementing VPA How do the government and state agencies responsible for forestry view the VPA? The government of Ghana with support form donor agencies and partner countries have been supporting Ghana’s efforts at sustainable forest management over the last decade. We see the VPA as a mechanism for supporting SFM and in particular the governance reforms that have targeted the forestry sector in Ghana. However our experience in these reforms have indicated some social impacts that go beyond the current requirements of VPA’s. Hence in our discussions and consultations we should look at the broader issues and not limit the discussions to just legality and legal compliance issues. We must also be mindful of the need to provide long term support that is sustainable to support countries embarking on the voluntary partnership agreements.

The Preparatory Process So Far Now let us examine briefly Ghana’s preparations to the VPA so far. First there is a multi stakeholder group that is the steering committee and is driving the process. The group is composed of personnel from relevant ministries that are key to the process. i.e. attorney generals department, Ministry of Lands forestry and Mines, Ministry of trade, Industry and the presidents special initiative, Ministry of Finance, CEPS, two representatives from industry one of which must account for more than 60% of the export volume, the national working group on forest certification and two representatives of civil society. The committee has submitted its first report with a road map to guide the negotiations for the VPA.

Identification of issues for negotiation and implementation Definition of Legality Design of a verification system Impact/risk assessment of initiative on country Strategies for containing the domestic market under a legality regime The steering committee has identified the following issues for negotiation and implementation: Definition of legality – Ghana through a multi-stakeholder consultative process must come up with a definition of legality to enable it negotiate with the EU and partner countries. Which laws should Ghana consider as critical to support SFM. The need to design a verification system that support the legality regime and is capable of tracing timber through the supply chain. There will be fall outs as a result of implementing the VPA’s. It is critical for Ghana to be informed of the risks and implications of the measures that will support the legality regime. For instance there is the need to establish a balance between resource availability and processing capacity. This will have implications on companies and labour. The VPAs have targeted the export markets, however for Ghana the domestic market structure and supply fuels illegal activities particularly by chainsaw activities. Various legislation have failed to address this problem and for Ghana any legality regime must also target the domestic market. After all charity begins at home.

Structures put in place for preparation Multi-stakeholder Steering Committee to oversee preparatory process Technical working groups/teams to deliver outputs for negotiation and implementation VLTP team Legal definition team Impact/risk assessment team Domestic market legality strategy Secretariat that gives technical and administrative support to the process So Ghana has put in place a multi stakeholder steering committee to drive the process, Technical working teams to look at specific activity areas and deliver outputs to support the negotiation process. There is a secretariat to provide technical and administrative support to the process

The Preparation Studies to inform negotiating position and implementation of schemes under agreement Fiscal study, legal & institutional study Review of forest control system and introduction of verification system Outputs of technical deliverables for the negotiation and implementation legal definition, domestic market legality options, impact assessment Consultation of interest groups on various deliverables It is expected that in our preparations the following activities will be undertaken to inform the process. A fiscal study to inform on benefit sharing mechanisms that is transparent and fair. A legal and institutional study to examine the changes that are required to implement the legal regime and inform the process on institutional change required to support the VPA. The review of forest control systems and the introduction of the verification system to support the VPA and guarantee the delivery of legal timber to the markets – domestic and export. Although the focus in the first phase will be exports. In the process the consultations with interest groups will be key in the process gaining broad stakeholder consensus/buy-in.

The consultative process on technical deliverables for VPA – Verification System Ministerial Clearance Steering Committee 1 event Civil Society NGOs 1 event Chainsaw Ops/ Illegal Loggers What have we achieved in our consultative process. Two consultations within the Forestry Commission to examine the verification system and its implications on existing procedures, two consultations with industry to sell the process to them. Some measure of resistance was observed and further consultations are required. What I find interesting in the process is the consultation with chainsaw operators and illegal loggers. This group recognises that the reforms could result in a hard landing are themselves seeking assistance to pursue other means of livelihood. A reflection of the problem and the need for a safety valve to allow these illegal operators to move into other economic and income generating areas is required. This reflect to a large extent the process on the verification system and a similar approach is being adopted for the legal definition. 1 event Industry 2 events FC internal 2 events

Road Map to Negotiation Step 5 Final formal Negotiations June 2007 Step 4 Design required Sector Programmes May 2007 Step 3 Conduct Impact Assessment Studies Mar 2007 Step 2 Agree Design of Legality Verification System Dec. 2006 How does Ghana view the negotiation process? The approach is for Ghana to indicate its commitment and agree on a frame work with the EU early in the process so that the steps indicated will form milestones and triggers for support. Step 1 Define legality November 2006

The Challenges What are the challenges in the process? This picture reflects some the key issues. A canoe being carved out in the heart of the forest. These people certainly do not have permits for extraction.

Challenge 1 - The Domestic Market Domestic market is served largely by a system of illegal logging – chainsaw operations Volume of trade on domestic market equals that of export Installing an export legality regime without tackling the domestic market has little meaning But VPA appears export oriented …

Challenge 2 - Industry & Trade Reaction to Reforms Ensuring buy-in of industry into initiative View of legal compliance as limitation to profits Ensuring that recalcitrant producers do not engage in a last minute cash-in before system closes loopholes Ability to balance power and interest level of stakeholders to minimise undue political interventions

Challenge 3 - VPA & Previous National Reform Initiatives Align reforms under the VPA to ensure that they compliment earlier gains in reform processes Balance forces for and against the new reforms Managing reform fatigue Establishing the link between FLEGT and the previously initiated Certification process Reconciling interests and differences of Civil Society and Industry & the Regulatory System

Lessons Learnt Initiative presents opportunities to harmonise interests of industry, civil society, land owners, State and market Partnership of regulatory system with civil society is required in the process to stabilise policy implementation environment Status quo need challenging Communication and clarity of purpose is critical for success of initiative Status quo to change. We cannot continue to adopt the business as usual approach.

Some Reflections & Recommendations

Recommendations Network of prospective producer country signatories to the agreement Buyers could act more to influence behaviour of producers Development of capacity of Civil Society is required to deepen their contribution to process VPA must be placed in context – PEFC, FSC must examine policies and engage producer governments more constructively Target support to ENGOs

Recommendations cont’ EU must have an appreciation of the wider implications of implementing legality regimes in producer countries social, economic and political implications The concomitant support for managing entire change and mitigating negative impacts Improved consultation and engagement on the process between EU and prospective partner countries

attah@ghanatimber.co.uk chrisbeeko@hq.fcghana.com Thank You attah@ghanatimber.co.uk chrisbeeko@hq.fcghana.com