Eliminating Illegal Logging: A Business Approach

1
Eliminating Illegal LoggingA Business
Approach

• The Forest Dialogue
• March 8, 2005
• John Heissenbuttel, Vice President, Forestry
  Wood Products
• American Forest Paper Association

2
OVERVIEW

• AFPA Policy Statement on Illegal Logging
• Presidents Initiative on Illegal Logging
• Illegal Logging and Global Wood Markets The
  Competitive Impacts on the U.S. Wood Products
  Industry
• Illegal Logging Enforcement Alliance
• Sustainable Forestry Initiative Program

3
AFPA Position Statement on Illegal Logging

• Adopted by AFPA Board January 2002
• Obey domestic and sovereign laws
• End illegal logging in protected areas
• Support government monitoring and assessment
• SFM Certification can help but is not the solution

4
Presidents initiative Against Illegal Logging

• Announced July 2003
• Assist developing countries combat illegal
  logging
• Good governance
• Community-based actions
• Technology transfer
• Harnessing market forces

5
Illegal Logging and Global Wood MarketsThe
Competitive Impacts on the U.S. Wood Products
Industry

• Prepared for AFPA by
• Seneca Creek Associates, LLC
• and
• Wood Resources International, LLC

6
Study Background Scope

• Provide perspective and context, i.e. how valid
  are reported estimates?
• Analyze impacts of illegally produced and traded
  wood products on the ability of U.S. producers to
  export into key overseas markets
• Review institutional and government initiatives

7
Reported Estimates of Illegal Logging
Reported in the Literature
Analyzed Log Supply (Production Plus Imports)
All Species, All Sources
Tropical Imports Only
Tropical Hardwood Only
Imports Only
Percent
Source Seneca Creek Associates, LLC
8
Illegal Forest Activity Represents

• Between 5 and 10 of global roundwood production
• Between 3 and 10 of global lumber and plywood
  production (all species)
• Between 15 and 20 of global production of
  hardwood lumber and plywood

9
Corruption Illegal Logging
Source Transparency International WRI/SCA
estimates
10
Increase in US Wood Product Exports due to
Elimination of Illegal Logging
Based on GFPM simulation, opportunity cost for
U.S. exporters is at least 460 million annually
Millions
Cumulative 4.6 billion Average 460
million
11
Selected Findings/Observations

• Suspicious wood products depress world prices
• Opportunity cost can be measured

12
Goal Reduce the Cost Spread
Legitimate Material
Cost
GOAL
Illegal Material RISK
13
Goal Not Widen the Cost Spread
Legitimate Material
Cost
Illegal Material RISK
14
Selected Findings/Observations

• Illegal Activity Confused with Sustainable
  Management
• Primarily a symptom of unclear or poorly enforced
  forest tenure, weak political institutions,
  corruption, inadequate natural resources planning
  and monitoring, and lax enforcement of sovereign
  laws and regulations.

15
Selected Policies/InitiativesWill They Eliminate
Illegal Logging?

• FLEG (T)
• EC bilateral agreements to create a Timber
  Licensing System
• Shipments of logs, lumber and plywood would
  require a certificate of legality
• Green Procurement Policies
• Guidelines for legal, legal and progressing
  toward sustainable, and legal and sustainable
• UK Central Point of Expertise on Timber (CPET)
  advises on validity of certification programs

16
Alliance to Combat Illegal Logging

• Conservation International and AFPA
• Identify and develop cost effective means of
  identifying commercial scale, illegal logging
  activities in globally significant protected
  areas (i.e. national parks)

17
Alliance to Combat Illegal Logging

• Support enforcement of laws
• Reach out to responsible, local forest sector
  companies and other interested parties for their
  support

18
Sustainable Forestry Initiative Program

• 2005-2009 SFI Standard
• Objective 8. To broaden the practice of
  sustainable forestry through procurement
  programs.
• including efforts to thwart illegal logging.