• Endangered species

Endangered species (CITES)

This report examines how importing/consuming governments might establish and operate a system for denying market access to timber and wood products produced and exported illegally. It covers processes and procedures for identifying illegal timber, methods for denying markey access to those products, effective forms of international co-operation and the implications for WTO trade rules. Some consideration is also given to Anti-corruption and money laundering initiatives.

On the issue of identifying chain of custody the report makes a number of

• Simple paper-based certificates or movement documents such as those employed under CITES are prone to theft and fraud; more technologically sophisticated solutions – of which there are many available – should be used.
• Comprehensive chain-of-custody monitoring of every stage of the chain of production, processing, export and import is necessary to guarantee legality.
• Independent third-party auditing (eg, FSC) of the process is necessary to guarantee the validity of the system
• Although the costs involved in setting up such a system are not likely to be large, they are not negligible
• Capacity-building support and possibly legal and administrative reform, will be
• Data on export and import of timber and wood products should be collected and exchanged more systematically to help tackle the problem of illegal trade.

The paper moves on to discuss options for reducing or ending market share for illegal timber and wood products in consumer countries. The clearest and prefered approach is to make the sale or import of such products illegal in the consumer country. This would require new legislation which would either have to adopt a definition of illegality based on the producer country’s or establish some form of external, preferably internationally agreed, standards.

Non-coercive means of promoting the markets legal products are identified with recognition that the most effective combination of measures is likely to be a step-wise implementation of all of them as follows:

• Encouragement for voluntary action on the part of industry
• Establishing further favourable tariffs
• An effective government procurement policy, implemented at central and local level
• Lacey Act-type legislation outlawing the import and sale of illegal timber and wood products
• Legislation outlawing the import and sale of products not positively identified as legal.

Other inerim measures identified as precursors to legislation include:

• publicising impacts in producer countries
• delivery of capacity-building assistance
• establishment of robust systems for identification of legal production
• negotiation of bilateral and regional agreements with producer governments.

The authors point out however that bilateral agreements are of limited value and that the ultimate aim should be a multilateral agreement open to any country. CITES, they argue, may well prove of use in protecting particular endangered species but cannot reasonably be extended to cover the whole of the timber trade, and a new agreement aimed at controlling trade in illegally logged timber is therefore called for; the ITTO and, in particular the FAO, provide potential forums in which such an agreement could be discussed.

On the issue of WTO compliance the report outlines some tentative conclusions about the design of policy instruments which affect trade:

• The less trade-disruptive the measure involved, the lower the chance of a successful challenge under the WTO – a requirement simply for labelling, or government procurement policy, would be less likely to fail than an import ban.
• The more it can be shown that less trade-disruptive measures – such as preferential tariffs – have been attempted and have not proved effective, the greater the chance more trade-disruptive measures have of being found acceptable
• Similarly, the more precisely targeted the measure, the less the chance of a successful challenge
• An embargo applied against an country’s entire timber exports because some of them were believed to be illegal would be more vulnerable to WTO challenge than an embargo applied only against products which could be proved to be illegal, or not shown to be legal
• The less discriminatory the measure is, the lower the chance of a successful challenge
• The greater the effort to ensure that a measure is multilaterally acceptable, the less it is likely to be challenged. And the latest shrimp-turtle decision implies that even unilateral measures applied while a multilateral agreement is in the process of being negotiated may be acceptable.
• There is sufficient ambiguity about the impact of the relevant WTO agreements that it should be possible for many different types of trade-restrictive measures to be designed and implemented so as to survive a WTO challenge.

Finally the report considers the wider context encompassing the disposal of the profits gained from the illegal activities, and the sources of finance for the sector. It recommends that contacts should be pursued between the two areas, and the issue of controlling illegal logging taken up in the relevant international forums.

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