UK Trade Initiatives

PresentationPresentation

1. UK Timber Trade2. UK Trade and Indonesia3. TTF Trade Initiatives4. China5. Final Thoughts

1. UK Timber Trade2. UK Trade and Indonesia3. TTF Trade Initiatives4. China5. Final Thoughts

UK Consumption by Volume of Imported Tropical/Non-Tropical Timber & Panels 2003

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Softwood

Hardw

ood

Plywood

Partic

leboar

dO

SB

Fibre

boards

00

0s

cb

m

Total 2003

Tropical

Non-Tropical

Import volumes and % change

Import volumes and % change

2. UK and Indonesia2. UK and Indonesia

•Strong timber trading partners•95% Tropical Hardwood Plywood•In 2001 Indonesia was UK No. 1

supplier•Now it is No.4……

•Strong timber trading partners•95% Tropical Hardwood Plywood•In 2001 Indonesia was UK No. 1

supplier•Now it is No.4……

3. TTF Trade Initiatives3. TTF Trade Initiatives

A. Indonesian Action PlanB.Timber Trade Action PlanC.Market ResearchD.Trade ForumsE.Responsible Purchasing Policy (RPP)

A. Indonesian Action PlanB.Timber Trade Action PlanC.Market ResearchD.Trade ForumsE.Responsible Purchasing Policy (RPP)

A. Indonesia Action PlanA. Indonesia Action Plan

• July 2003 - June 2004• Response to “Partners in Crime”• Risk assessment of mills supplying illegal

timber• All mills were at risk• Mill Action Plans• Auditing Framework• Dutch trade joined initiative• Trade with Indonesia halved in that year

• July 2003 - June 2004• Response to “Partners in Crime”• Risk assessment of mills supplying illegal

timber• All mills were at risk• Mill Action Plans• Auditing Framework• Dutch trade joined initiative• Trade with Indonesia halved in that year

• €7m 5-year project to help suppliers get verified legal timber with chain of custody from Cameroon, Congo-Brazzaville, Gabon, Indonesia and Malaysia.

• Core partners are the UK, Dutch, Belgium, French, Malaysian and Indonesian timber organisations

• Tropical Forest Trust (TFT) is project manager• Results: Audited timber from 183 mills and forests

– the first step towards sustainability• Operational in Indonesia now

• €7m 5-year project to help suppliers get verified legal timber with chain of custody from Cameroon, Congo-Brazzaville, Gabon, Indonesia and Malaysia.

• Core partners are the UK, Dutch, Belgium, French, Malaysian and Indonesian timber organisations

• Tropical Forest Trust (TFT) is project manager• Results: Audited timber from 183 mills and forests

– the first step towards sustainability• Operational in Indonesia now

B. EU Timber Trade Action PlanB. EU Timber Trade Action Plan

The TFT helps UK, Dutch and Belgium traders

Link their supply chains Secure system

Legal wood

That is independently audited

From here

To here

So…

Source: Scott Poynton, TFT

Engagement v. BoycottEngagement v. Boycott

•Wijma•CIB and Danzer•GreenAcre•Tjipta

•Wijma•CIB and Danzer•GreenAcre•Tjipta

C. UK Market Research C. UK Market Research • Rupert Oliver, Hardwoodmarkets.com• Is there a premium for verified legal or certified

timber?• 15 agents, importers and merchants, for timber

delivered to the UK, said:– No for softwoods– Yes for hardwoods – 2-30%

• A New Trend – “considerable interest”– …..A significant number of larger companies … implementing

systematic procedures aimed at ensuring that 100% of their supplies are derived from demonstrably legal sources”

• Conclusion: UK Government Timber Procurement Policy is having an impact …. but its patchy

• Rupert Oliver, Hardwoodmarkets.com• Is there a premium for verified legal or certified

timber?• 15 agents, importers and merchants, for timber

delivered to the UK, said:– No for softwoods– Yes for hardwoods – 2-30%

• A New Trend – “considerable interest”– …..A significant number of larger companies … implementing

systematic procedures aimed at ensuring that 100% of their supplies are derived from demonstrably legal sources”

• Conclusion: UK Government Timber Procurement Policy is having an impact …. but its patchy

D. Timber Trade ForumsD. Timber Trade Forums

1. Briefing Pack2. Trade forums in 4 African countries (May

– July 05) Ghana, Cameroon, Gabon and Congo

Brazzaville – over 300 participants EU traders talking directly with suppliers

3. Trade forums in 3 Asian countries (Indonesia, Malaysia, Vietnam) in 2006

1. Briefing Pack2. Trade forums in 4 African countries (May

– July 05) Ghana, Cameroon, Gabon and Congo

Brazzaville – over 300 participants EU traders talking directly with suppliers

3. Trade forums in 3 Asian countries (Indonesia, Malaysia, Vietnam) in 2006

Key Messages to industry

• EU Markets are changing – there is a premium for verified legal and sustainable timber (Oliver, 2005)

• Buyer purchasing policies are beginning to cut out the worst suppliers

• Support FLEGT VPA to eliminate the bad guys• Buyers need practical cost-effective solutions• EU market versus growing Chinese/Indian market –

choices for producers!!!!• Increasingly difficult to supply the EU market without

proof of legality

“Get legal or lose markets!”

• EU Markets are changing – there is a premium for verified legal and sustainable timber (Oliver, 2005)

• Buyer purchasing policies are beginning to cut out the worst suppliers

• Support FLEGT VPA to eliminate the bad guys• Buyers need practical cost-effective solutions• EU market versus growing Chinese/Indian market –

choices for producers!!!!• Increasingly difficult to supply the EU market without

proof of legality

“Get legal or lose markets!”

E. The Responsible Purchasing Policy (RPP)E. The Responsible Purchasing Policy (RPP)

• Assessment of all suppliers• Risk management system• Feedback to suppliers• Requires evidence of

legality/sustainability for high risk countries, e.g. Indonesia

• Assessment of all suppliers• Risk management system• Feedback to suppliers• Requires evidence of

legality/sustainability for high risk countries, e.g. Indonesia

Continuous ImprovementContinuous ImprovementPhase 1 - process Phase 2 - performance

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6

           

         

         

           

           

         

           

           

         

         

           

         

Sustainable

Legal -> sustainable

Legal

Risk assessed

Riskassessment

system

TTF Code of Conduct

• Traders decide how quickly they move forward• Traders must systematically eliminate high

risk suppliers• RPP helps identify these suppliers• RPP helps suppliers reduce their risk rating

• Traders decide how quickly they move forward• Traders must systematically eliminate high

risk suppliers• RPP helps identify these suppliers• RPP helps suppliers reduce their risk rating

Questionnaire Guidelines

Choice tables

1. Questionnaire

TTF member (step 1)

2. Questionnaire

Supplier (step 1)

3.Completed questionnaire

TTF member (step 2)

sends

completes

Risk rates

Supplier (step 2)

Sends results and support

4. Info on how to improve risk rating

6. Independent audit

Returns + docs s

howing objective evidence

Takes action

5.Annual Management Report

completes

绿奥诺 4. China 4. China

100-120 million people looking for work

Not enough trees

Greenpeace International Press Release

“London, International — A criminal trail of illegally logged timber from the world's last rainforests, which is 'laundered' in China before arriving in Europe, the USA and other consumer countries, has been uncovered by a major Greenpeace investigation.

Greenpeace International Press Release

“London, International — A criminal trail of illegally logged timber from the world's last rainforests, which is 'laundered' in China before arriving in Europe, the USA and other consumer countries, has been uncovered by a major Greenpeace investigation.

The TTF response so farThe TTF response so far

A. Examined the allegationsB. 9 TTF members decided to stop

imports of plywood with bintangor-faced veneer from Papua New Guinea

C. Those members are securing alternative domestic plantation species

D. Organised the China SeminarE. Developed a practical response –

the China Action Plan

A. Examined the allegationsB. 9 TTF members decided to stop

imports of plywood with bintangor-faced veneer from Papua New Guinea

C. Those members are securing alternative domestic plantation species

D. Organised the China SeminarE. Developed a practical response –

the China Action Plan

TTF China Action PlanTTF China Action Plan1. Code of Conduct Study of members (TFT) –

completed last week2. Documentary evidence of legal logs (TTF and

TFT) – report due end of March3. General Chinese industry study for TTF members 4. “Scoping and Mill Action Plans” for Chinese

suppliers by TFT (financed by TTF agents/importers)

5. Initial supply chain support work - TTF/TFT joint project (DEFRA) – April 2006

6. Supply chain support work under the Timber Trade Action Plan for Latin America and China (submitted Nov 2005, result expected July 2006)

1. Code of Conduct Study of members (TFT) – completed last week

2. Documentary evidence of legal logs (TTF and TFT) – report due end of March

3. General Chinese industry study for TTF members 4. “Scoping and Mill Action Plans” for Chinese

suppliers by TFT (financed by TTF agents/importers)

5. Initial supply chain support work - TTF/TFT joint project (DEFRA) – April 2006

6. Supply chain support work under the Timber Trade Action Plan for Latin America and China (submitted Nov 2005, result expected July 2006)

5. Final Thoughts5. Final Thoughts• Importers have a responsibility to act• But our suppliers need help too

– tools and common approaches– what market requires? – what is credible?

• A role for NGO’s– Help develop a legality definition for auditing

• Dialogue with industry• Get fundamentals right; ownership and tracking• Give industry reasonable targets• Recognise those steps • Encourage good performers

– Blow the whistle on bad performers…..– But keep responsible importers engaged

• Importers have a responsibility to act• But our suppliers need help too

– tools and common approaches– what market requires? – what is credible?

• A role for NGO’s– Help develop a legality definition for auditing

• Dialogue with industry• Get fundamentals right; ownership and tracking• Give industry reasonable targets• Recognise those steps • Encourage good performers

– Blow the whistle on bad performers…..– But keep responsible importers engaged

Thank YouThank You

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