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FLEGT, VPA, EUTR and their possible impact on the Bolivian timber sector

Dear All,

I would like to share with you all an excellent report prepared by Christopher Carden, Robbert Wijers and Paul Zambon on the forest sector in Bolivia, financed by CBI (Centre for the Promotion of Import from developing countries) of The Netherlands (related to the Ministry of Foreign Affairs, DGIS, The Hague).

It gives a very good picture of the state of play in Bolivia, as well as presenting clearly the EUTR and VPA and their challenges.

I hope you enjoy the reading as much as I did.



Executive summary

This study was developed at the request of the Timber Task Force (TTF) in Bolivia and its ally in The Netherlands, the Centre for the Promotion of Imports from developing countries (CBI). The reason behind it was the fear that from the introduction of the EUTR in March 2013 there would be no possibility of continuing exporting Bolivian timber (products) to the EU market, without there being a signed Voluntary Partnership Agreement (VPA). Therefore the objective of the study was to inventory the actual situation in Bolivia and develop a kind of action plan that would enable the achievement of a functional VPA within a year. S-FOR-S formed a team of consultants to implement a desk study (internet, document review) and a field mission (discussions, interviews, observations). Both in Bolivia and in the EU a series of companies involved in the trade of Bolivian timber (products) and other relevant stakeholders of the sector were interviewed.

The forestry sector (NTFP’s and timber (-products)) is important for the Bolivian economy, as the contribution to the GNP is approximately 3 %. It should be much higher, due to the illegal logging problem, which is estimated at approximately 50% of the total harvested volume. In addition, the formal forestry sector contributes approximately 4 % to the national employment. In 2011 the forestry sector contributed 8.8 % to the total export value of Bolivia; whereas Brazil nut ("castaña") was the principle forest export product, timber (products) contributed 3.2% to the total export value, with an amount of US $ 85.1 million.

The EU market is the most important one for Bolivia in terms of export value (covering one third of that value). The export value to the EU has increased by approximately 450 % over the last decade and is characterized by high added value. The US market diminished during the same period, while the Chinese market increased by an even higher percentage, but with much less added value. On the other hand, Bolivia is not a major provider of tropical timber (products) to the EU market, with less then 1 % of the total value of tropical timber imported to the EU.

An important part of the stakeholders of the forestry sector in Bolivia is not well informed on the concepts of and processes related to FLEGT, VPA and EUTR. There is a lack of information in general and there are many misunderstandings. During the field mission the necessary explanations were given to the contacted people. Nonetheless an information campaign is required to prepare the sector in general for the introduction of the EUTR. The TTF may play an important role in this sense.

Based on the experiences with VPA processes worldwide and taking into consideration the actual Bolivian context (with an important informal sub-sector and lack of institutional capacity, among others) it will not be feasible to achieve a VPA in the short term (within 1 year). However, it seems useful to initiate such a process in order to achieve a VPA in the medium or long term, provided that the Government of Bolivia (GoB) shows real interest in it. The initiative must be taken by the GoB, as the GoB itself will be the most important actor, followed by the EU. It is however very important that all other stakeholders relevant to the sector are involved in the entire process, in order to guarantee the success of the VPA. It is recommended that the donor platform involved in the environmental sector in Bolivia lend its support to the process.

In the short term the timber sector must focus on other alternatives: 1. the Verification of Legal Compliance (VLC), for example according to the verification systems of SW/RA or SGS, for companies that export timber legally but which have not yet been FSC certified or legally verified or 2. the certification of sustainable forest management (SFM), like FSC or PEFC, and the related CoC, for companies that have previously been FSC certified or currently have a valid certificate. The level of VLC is lower than the level of SFM (which goes way beyond legal compliance), but it coincides with the level required by the EUTR and can be reached more easily in the short term by the majority of companies.

In the context of the EUTR, the authorities in the EU will always accept a FLEGT certificate based on a functional VPA (at the level of a partner country) or a CITES certificate. It is most probable that timber with a VLC or SFM certificate will be accepted by the due diligence systems of the operators and/or monitoring organizations in the EU partner countries. A third option, sending proof with each batch to demonstrate compliance with all relevant laws and regulations of Bolivia, appears to be rather laborious and more risky and therefore does not seem feasible.

The implementation of a VLC support programme is recommended, focussing, in the short term, on medium sized timber exporting companies, in order to assure their being prepared for the introduction of the EUTR. At a later stage, a functional VPA should make it easier for small companies and communities to become exporters also.

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Antoine Saintraint
3 August 2012

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