The EUTR: a long to-do list

Summary
• Each EU state will decide how it polices the EUTR.
• Countries will also decide on their own penalties.
• Controversy surrounds a proposed online EUTR information platform.

The latest Chatham House Illegal Logging Update conference highlighted the need for clear information and guidance on the EU Timber Regulation (EUTR), but also disagreements how that should be delivered.

The event in London last week underlined too how much there is left to do to get the measures in place to implement the anti-illegal timber legislation, which takes effect in March 2013.

The EUTR formed the core of discussions on day one of the conference and a packed house demonstrated the level of interest.

The basis of the new legislation is to make it an offence to “first place” illegal timber on the EU market and put an obligation on “first placers” to undertake due diligence risk assessment of their sources to avoid it getting into their supply chain.

Business interests

Svetla Atanasova of the European Commission said the EUTR was framed to take business interests into account and not to “tie the hands” of operators (as the regulation refers to ‘first placer’ businesses). They could devise their own or adopt a due diligence system developed by an approved Monitoring Organisation (MO), which both trade bodies and private companies will be able to set up under the Regulation. Where suppliers are considered to pose more than a negligible risk, instead of just dropping them, further “due diligence methodology implementing regulations” will also allow them to provide further sourcing information.

“Companies just have to show they have taken adequate and appropriate measures to mitigate the further risk,” said Ms Atanasova.

She also said that existing third-party verified environmental certification schemes could be a “tool for risk assessment and risk mitigation” within a due diligence system.

But Emily Unwin of lawyers Client Earth said the role of certification in the regulation was one aspect that needed further clarification.

“It can be a tool, but is not a green lane,” she said. “Operators must assess its relevance to the requirements of their due diligence system and whether it responds to its questions.”

Further guidance, she added, was also needed on how the EUTR applied to composites and other complex products. And its scope had to be made clear to the market; including that it Covers material supplied not for profit timber which a company supplies to itself (from an overseas subsidiary, for example), and wood harvested within the EU as well as imported.

Disagreement

Where disagreement arose was whether one of the principal information avenues should be the online EUTR Regulation Platform.

The Platform was devised by French-based African tropical timber industry organisation ATIBT and the not-for-profit ProForest Initiative and the premise is that businesses need “sound and reliable information on legal and illegal timber” to comply with the EUTR. The current wide range of information sources, it says, makes it “cumbersome” for them to find out what they need. And the same applies for bodies which will administer and police the Regulation. The Platform would simplify things by making “information from a range of sources freely available via one”.

“It will include details of applicable legislation in countries of harvest, prevalence of illegal purchases in specific areas and occurrence of illegal logging for particular species,” said Julien Massetti of the French agriculture ministry. He added that the Platform has received €78,000 from France and was now looking for €2-3m more from the rest of the EU.

But speakers from the floor raised a number of concerns about the concept. These included that the Platform was backed by a producers’ organisation and fulfilled a role that was “not their obligation”. There were also issues over its legality and fears it could prejudice the market against certain timber producing areas and species. Others said there was a risk that operators would rely too heavily on it . They might even assume it had legal status, if backed EU-wide, and consequently back pedal on their own due diligence obligations.

“The Platform would be a huge and unnecessary expense,” said Rachel Butler of the European Timber Trade Federation. “All the information it will carry is already out there, including on the Chatham House illegal logging site. What is needed is clear practical advice and guidance on how to apply the information and the bodies exist to provide that. This regulation must also be put in perspective – illegal logging is a small portion of the trade.”

To-do list

Among the items on the long to-do list for introduction of the EUTR, the audience heard, is its incorporation into the laws of the 27 EU states, but that can’t be done until after final EU ‘implementing’ legislation in the summer. All the countries are reported to have selected their ‘competent authority’ (CA) with overall charge for the regulation (Defra in the UK), but they still have to establish who will administer it on a day-to-day basis (the UK is deliberating between the Environment Agency and National Measurement Office).

Would-be monitoring organisations will also not be able to apply for the role until after EU ‘delegated’ legislation has gone through in March and penalties for breaches will be set by each country and may not be decided until after the EUTR ‘implementing regulation’. According to a European Commission representative, if there is a wide penalty discrepancy between states – and some countries, like Sweden, are contemplating sanctions up to two years in prison – the EU will then have to impose minimum levels to avoid weak points for illegal timber to enter.

Another important element to consider with the EUTR, said Beatrix Richards of WWF UK, is the EU’s FLEGT Voluntary Partnership Agreement initiative. Tropical countries which sign up to the scheme undertake to implement sustainable forest management. In exchange VPA-licensed timber gets preferential EU access and bypasses EUTR due diligence risk assessment. However, none of the six tropical countries signed up or pledged to, have yet delivered licensed material and just four EU countries have implemented legislation to receive it. Combine the work still to do here and on the EUTR, concluded Ms Richards, and the “EU has a busy year ahead”.