1. Certification and FLEGT legality verification Duncan Brack Associate Fellow, Energy, Environment and Development Programme, Chatham House Forest certification and legality verification – policy implications Chatham House, 22 February 2007

2. 2 FLEGT and VPAs VPAs now under negotiation in Ghana, Indonesia, Malaysia – all hoped to be concluded end 2007 Cameroon probably next Other informal discussions, expressions of interest, etc., with: Viet Nam, Liberia, Central African Republic, C ô te d’Ivoire, Democratic Republic of Congo, Gabon, Liberia, Republic of Congo, Ecuador, Honduras, Nicaragua First VPAs in operation 2009?

3. 3 FLEGT timber legality assurance system (1) Legality assurance scheme in each VPA will specify: Legal compliance: definition of legality according to laws of the partner country, including legal rights to harvest, forest management, payment of taxes, etc. Control of the supply chain: traceability and segregation of legal products Verification systems Issuance of licenses: consignment-based or operator-based Independent monitoring by third party

4. 4 FLEGT timber legality assurance system (2) Definition of legality may also need some work – e.g. Indonesia (contradictions national – local laws) Preparatory work already under way or completed in some countries, e.g. Indonesia, Cameroon Legality assurance system specified in VPAs will need to incorporate existing national schemes where feasible – i.e. where these are effective

5. 5 Relationship with certification Under what circumstances can certification schemes – national or international – provide adequate proof of legality? Definition of legality: What will VPAs define as legality? What do certification schemes currently define as legality? Verification of legality: What will VPAs require as proof of legality? What do certification schemes currently require as proof of legality?

6. 6 Definition of legality: FLEGT Definition to be determined in each VPA, but likely to include: Logging by holder of legal harvest rights Compliance with regulations on permitted harvest levels, environmental and labour regulations Payment of timber royalties, other fees Respect for others’ legal tenure rights May often need operational definition, together with process for review and modification

7. 7 Definition of legality: certification CPET evaluation of five schemes covered: Forest owner/manager has legal use rights Compliance with national legal requirements, including forest management, environment, labour & welfare, health & safety, other parties’ tenure and land rights Payment of all relevant royalties and taxes Compliance with CITES

8. 8 Definition of legality: conclusion Certification definition slightly wider than FLEGT (probably) – so adequate for FLEGT Problem with operational definitions? – probably not

9. 9 Verification of legality: FLEGT Regular audits of activities in FMUs and (where relevant) processing facilities Checks that chain-of-custody systems working as designed: generally through audits at key points, e.g. sawmills, plywood mills, export port, to check no unaccounted-for material entering the chain Can be conducted by state authorities or appropriate verification organisations Licenses can be issued to consignments or operators Probable need for independent monitoring

10. 10 Verification of legality: certification (1) CPET evaluation of five schemes covers: Compliance by certification body with ISO guidance, etc. Requirements for certification audits, including assessment of systems and documentation, verification of outcomes in the forest Consultation with external stakeholders, transparency, complaints procedure Accreditation by bodies in compliance with ISO guidelines

11. 11 Verification of legality: certification (2) Assessment of chain of custody by certification body in accordance with ISO guidance, etc. Certified chain of custody in place Mixing procedures Procedures for dealing with claims made about products

12. 12 Verification of legality: certification (3) In practice, certifiers exercise some freedom in making judgements about level of compliance with national laws – particularly where disputed Decision may be made quickly, and on basis of limited evidence ‘FSC … will not insist on perfection in satisfying the P&C’ No volume/throughput analysis May not be robust enough for FLEGT?

13. 13 Verification of legality: conclusion FLEGT and certification schemes could reinforce each other In particular, FLEGT-driven definition of legality may be helpful to certification schemes FLEGT will deal with larger volumes of products, and more complete oversight of supply chain But also will have to deal with more likely non- compliers Certification schemes may not be robust enough – but will FLEGT be?