Explanatory Memorandum to COM(2004)515 - Establishment of a voluntary FLEGT licensing scheme for imports of timber into the EC - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2004)515 - Establishment of a voluntary FLEGT licensing scheme for imports of timber into the EC. |
|---|---|
| source | COM(2004)515  |
| date | 20-07-2004 |
In May 2003 the European Commission adopted an EU Action Plan for Forest Law Enforcement, Governance and Trade (FLEGT) ( i). Council Conclusions on the Action Plan were adopted in mid-October ( i).
The Action Plan sets out a new and innovative approach to tackling illegal logging, which seeks to support developing countries' efforts to strengthen governance with the incentives for good practice which can be provided by the EU internal market. The core components of the Action Plan are support for improved governance in wood-producing countries, and a licensing scheme to ensure only legal timber enters the EU.
The licensing scheme for timber imports will be implemented on a voluntary basis through a partnership agreements with wood-producing countries and regions that agree to co-operate with the EU on this matter.
In accordance with the request made by Council in its Conclusions, the Commission has undertaken the following steps with a view to meeting the mid-2004 reporting deadline:
1. Prepare a draft Regulation for the FLEGT timber import licencing scheme;
2. Along with Member States, enter into discussions with wood-producing countries to seek their views on partnership agreements;
3. Arrange analysis of further legislative options which could be used to support the objectives of the action plan.
This proposal sets out the legislative framework to introduce such a licensing scheme. A rolling programme of consultations involving the Commission, interested Member States and potential partner countries is ongoing. These are reported in detail in annex to the Recommendation for negotiating directives submitted along with this document. On the basis of these initial discussions, and other political contacts, a recommendation for a mandate to negotiate FLEGT voluntary partnership agreements is presented to Council along with this proposal.
The Commission has initiated a scoping exercise to assess additional legislative options which could be used to support the objectives of the FLEGT Action Plan, and will report back to Council on this work later in 2004.
2. Extended impact assessment
An extended impact assessment analysis has highlighted the economic, social and environmental impacts of the proposed voluntary licensing scheme. In general terms, the strongest impact from the scheme would be felt in Africa, where the legal supply is constrained in relation to demand from the EU. In Asia and Latin America, the EU market has more limited significance.
Partner countries stand to capture substantial additional revenues. Expected environmental benefits include reduced pressure on forest resources and protected areas. The proposal has more nuanced social impacts, with the loss of local jobs dependent on illegal logging offset by the improved practice that generally accompanies legal enterprises. There is a clear risk of illegal trade being directed to other markets, with legal production exported to the EU. Measures should be taken to mitigate this risk during implementation.
Within the EU, impact of the proposal would be transmitted through potential changes to the price and supply of imported timber. The internal impact is expected to be modest. Timber prices could rise as illegal timber is eliminated from supplies to the EU, but the impact on markets would depend on the price elasticity of timber products, and the extent to which substitute products become attractive.
The magnitude of impact depends on overall coverage achieved under the licensing scheme. Impact would be minimal if only some of the EU's major exporters participate, but would rise if all major exporters take part.
Impacts arising through implementing the scheme in tropical countries would be focused most strongly in six Member States which together account for 83% of imports of tropical timber products to the EU. Concerning timber from temperate countries, particularly Russia, impacts would be focused in the Nordic countries. Imports to the EU from Russia greatly exceed the volume of imports from tropical countries, and this would need to be accounted for in the design of any voluntary licensing scheme in partnership with the latter.
Provisions for monitoring the scheme will be built into the implementing partnerships with wood-producing countries, and are written into the draft Regulation.
On this basis, the Commission proposes a timber import licensing scheme, to be implemented on a voluntary basis through partnerships with wood-producing countries. A detailed proposal in this regard is hereby presented.