1. EU Action Plan for Forest Law Enforcement, Governance and Trade Demand-side measures related to the EU FLEGT Action Plan Bucharest, 13 October 2008 Flip van Helden DG ENV European Commission, Brussels

2. EU Action Plan for Forest Law Enforcement, Governance and Trade Possible reasons to enter into FLEGT FMarket advantages FDevelopment benefits FDevelopment funding FSector reform FIncreased revenues FCountry reputation and rivalry FInternal political dynamics

3. EU Action Plan for Forest Law Enforcement, Governance and Trade EU demand-side measures Create market incentives for legal timber through: FGreen public procurement policies FDue diligence legislation

4. EU Action Plan for Forest Law Enforcement, Governance and Trade Green Public Procurement and timber I FTimber procurement policies in place in 7 EU member states; F10-20% of market on average with main effects on construction, furniture and paper products; FMost policies focus on sustainability only, some also recognise legality;

5. EU Action Plan for Forest Law Enforcement, Governance and Trade Green Public Procurement and timber II Green Public Procurement Communication (July 2008): FWood products dealt with under the priority categories; construction; energy; furniture; paper FMS are recommended to stipulate – as minimum – the use of legal timber; FFLEGT license recognised as proof of legality; FStarts a process of consultations with a view to streamlining public procurement policies;

6. EU Action Plan for Forest Law Enforcement, Governance and Trade Additional legal options I The process on additional options: F2006/07: Internet and stakeholder consultations FEnd 2007: Impact assessment study FJune 2008: Proposal in Inter-Services Consultations F3 rd quarter 2008: Proposal presented to Council?

7. EU Action Plan for Forest Law Enforcement, Governance and Trade Additional legal options II FOption 1: VPA expansion FOption 2: Voluntary private sector schemes FOption 3: Ban on imports FOption 4a: Prohibition on trading illegal timber FOption 4b: mandatory private sector legality guarantee Conclusion: None of the discussed options are viable New Option: ‘due diligence’

8. EU Action Plan for Forest Law Enforcement, Governance and Trade Due diligence proposal I Key characteristics of the proposed regulation: FAim: To recognize the efforts of producers/traders that invest in the legality of their timber products; FProduct scope: round wood; sawn timber; veneer, panels, wooden furniture, pulp, paper, wood chips; FFocus: The act of placing timber products on the Community market.

9. EU Action Plan for Forest Law Enforcement, Governance and Trade Due diligence proposal II FObligation: traders to demonstrate due diligence in ensuring the legality of the produce traded; FLegality: legislation applicable in country of harvest; FSystems: traders may develop their own control systems or use existing systems and COCs; FRisk: Use of risk assessment procedure;

10. EU Action Plan for Forest Law Enforcement, Governance and Trade Due diligence proposal III What will be required of EU traders: FTracking and tracing: Track flow of timber including determination of country of harvesting FRisk management: assess risk on the basis of profile of supplier and country of harvest; FDocumentation: Have access to information concerning compliance with applicable legislation FAudits: Audit effective implementation

11. EU Action Plan for Forest Law Enforcement, Governance and Trade Due diligence proposal IV FGuidance: Exact Criteria for due diligence to be developed through a comitology procedure; FExemptions: FLEGT and CITES timber; FEnforcement: Check on use of due diligence systems by the Member States;

12. EU Action Plan for Forest Law Enforcement, Governance and Trade Expected effects FLevel playing field: Requires all EU traders to use due diligence and prevent undercutting; FSupply Shift: provides an incentive to source imports from low risk rather than high risk suppliers; FPremium: May generate a premium for legal timber FIncentive for FLEGT: Provides partner countries with an incentive to join FLEGT

13. EU Action Plan for Forest Law Enforcement, Governance and Trade Thank you