Pro-growth NGO says solution to illegal logging is aid, not trade bans
Chatham House has released a report arguing that agricultural commodity production, rather than illegal logging, is the major driver of global deforestation. This is a significant policy shift for the influential think tank, highlighting some of the flaws of their past illegal logging agenda, as well as their intended future campaign direction.
The recent acknowledgement comes after a decade of costly campaigning for global forest policy measures to combat illegal logging. It is a far cry from their early rallying calls. In 2005 Duncan Brack, one of the paper’s authors, wrote that illegal logging and associated trade “are important causes of deforestation and forest degradation in many developing countries”, and made unsubstantiated allegations that more than half of all forestry activities in South East Asia, Central Africa, South America and Russia could be illegal. These messages have been subsequently reiterated. In 2010 Sam Lawson – a Chatham House Associate Fellow – was still describing illegal logging as a “key driver” of deforestation
Chatham House has now diverted their attention to what they describe as the “most significant” driver of deforestation – agriculture. So what has happened to all that illegal logging previously highlighted by Chatham House?
Chatham House’s research and policy efforts were largely funded by European governments. Over the course of the Chatham House campaign, policy makers from these governments pursued measures to exclude ‘illegal’ timber from consumer markets under a broad European policy known as Forest Law Enforcement Governance and Trade (FLEGT). These measures have focussed on creating public procurement policies, developing bilateral agreements introducing licensing systems known as Voluntary Partnership Agreements (VPAs), and legislating due diligence requirements through the European Union Timber Regulations (EUTRs).
It is, however, unlikely that European policy efforts have had any serious effect on global rates of illegal logging. European policy remains largely dysfunctional. Few VPAs have been developed, with even fewer finalised, and none ratified. Most European governments have not yet nominated government agencies tasked with implementing FLEGT regulations.
Chatham House’s recent realisation instead reflects a flawed baseline assumption: rates of illegal logging were not so prominent to begin with. Robust analysis shows that illegal logging was not a major environmental problem 10 years ago when study of the phenomena began in earnest. Our most accurate estimates at the time showed that rates of illegal logging were small – probably between 8- 10% of total global timber production, the vast majority of which is likely to be traded in domestic markets and did not enter global supply chains.
Chatham House is a respected independent think tank. It relies on public funding and has received significant programmatic funding for their illegal logging research and communications campaign from the UK government, principally the UK’s aid agency the Department for International Development (DFID). During the three years between 2010 and 2013, DFID funding records indicate that Chatham House received over 1 million pounds from DFID earmarked for their global deforestation program.
The Chatham House program has generated glossy reports which purport to assess the rate of and response to illegal logging; a handsome website portal hosting all manner of material, much of which has been produced by radical environmentalists to advance their agenda of halting the forestry industry; and sponsorship of regular ‘stakeholder’ meetings dominated by NGO campaigners and European policy makers.
The underlying impact of this communication and research campaign has been to generate public support for FLEGT and UK government policy. Other European governments with a stake in promoting FLEGT – including Finland, France, Germany, the Netherlands – have also invested in the extensive Chatham House research and communication programme.
The real tragedy is the illegal logging debate has been a red herring, as now implicitly recognised by Chatham House. Scarce resources and political capital have been thrown at a non-issue, at the cost of solving genuine environmental problems with widespread material consequences.
In the process, Europe has spent millions on creating policy which harms developing countries by restricting trade from their forest-product industries. In a classic bait and switch, developing countries have been coerced into complying with European policy through ‘Voluntary Partnership Agreements’; those that don’t sign on have been threatened with trade bans. The ultimate effect will raise costs and decrease competitiveness for producers in developing countries.
This policy was in part ‘achieved’ with the help of Chatham House’s findings that illegal logging and trade in illegally logged timber is a major global problem. This argument helped make trade restrictions on environmental grounds politically palatable. But with FLEGT all but finalised, European funding for illegal logging campaigning is likely to start drying up. A campaign against deforestation allegedly driven by agricultural commodity production might provide a new source.
Chatham House skips over critical part of debate: the technical analysis
One thing that agricultural producers should not expect from Chatham House’s new campaign angle is robust technical analysis to support their allegations regarding deforestation.
Underlying Chatham House’s refocussed attack on agricultural commodity production, are numbers about continuing loss of forest land, but no bearing from which to chart environmental success other than the mantra now common among international environmental groups and leading EU members: that deforestation must cease in order to protect the environment.
What environmental value is advanced by ceasing deforestation? There may be an argument in the UK that more biodiversity could be fostered if the UK’s relatively meagre forest estate were expanded, given so little is left; but the fact is most developing countries have already set aside more forest on average than exists in most European economies.
Groups like WWF argue that cessation of deforestation is necessary to protect biodiversity. However policy makers lack substantive, objective and technically-sound analysis which sets out a methodology and enables formulation of targets for areas to protect biodiversity, areas to be used for other more productive uses and areas for sustainable forestry.
Environmental groups want larger conservation areas – not for any scientific or even environmental reason, but to satisfy the contention no more trees should be cut down.
With all the effort, money and time that went into the illegal logging campaign, it produced little research which provides sound numbers about the rates of deforestation, including major work sponsored by Chatham House. Is it not curious that no one was interested in diverting some of the large amount of funding available to undertake technically sound analysis of the rates of deforestation and the drivers?
Or that few donors seem interested in funding development of full forest inventories which would enable forest agencies in developing countries to get an exact picture of their forest biodiversity and develop soundly based plans to ensure it is protected while at the same time developing application of modern forest methods to generate productive returns and enable forest regrowth?
Chatham House appear content with this one-sided debate, where there have been few efforts to build a technically-based picture of the environmental problems cessation of any forest removal is supposed to ameliorate. They also appear to advance the use of coercion in the form of threatening closure of markets unless exporting nations establish only forestry practices of which wealthy importing nation approve.
There is no international instrument anywhere which endorses that principle. The UN Charter abjures coercion. Consistent with this, the UN Agenda 21 global environmental agenda adopted at the 1992 Rio Earth Summit expressly endorsed maintenance of the multilateral global trading system (formed by the rules of the WTO).
There is nothing in the World Trade Organisation (WTO) rules which justifies use of such market coercion by more powerful economies. Some may believe that enshrining VPA bilateral arrangements in a bilateral legal treaty subsumes commitments arising from membership of the WTO. It would be a simple matter for one party to withdraw from such an agreement and take a WTO action.
Chatham House should have considered the morality of Europe’s threat to close markets to products which have not be licenced through a VPA, given the importance of trade in building national economies and raising living standards in poor countries. Especially when there are no tangible indicators of what constitutes effective protection of biodiversity in forests by which the extent of damage might be measured, or even objective assessments based on sound empirical measurement of the extent of illegal logging.
Chatham House is now, like others – WWF is leader of this concept – considering control of supply chains to demand compliance with specific sustainability standards from producers. It is also advocating their use by European Governments procurement policies to pressure suppliers to adopt higher sustainability standards.
Improved governance is now a leading interest in EU governments and Chatham House. Two decades back a leading goal of improved governance was to commit all members of the WTO to avoid restrictions on trade and in economic fora to promote laws which prevented large economic players from distorting markets.
Generalized statements to protect the environment – unsupported by technically sound data or criteria – are now touted as ‘improved governance’. Yet this is at the very expense of the opportunity given to poorer countries from open trade and unrestricted markets to build wealth and raise living standards.
It seems that Chatham House has skipped over a critical part of the debate.
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The Jakarta Post published comments by World Growth chairman Alan Oxley on the recent policy developments within APEC’s Expert Group on Illegal Logging and Associated Trade (EGILAT).
Ambassador Oxley’s original comments prompted a response from Indonesia’s senior forestry officials.
“Forestry Ministry secretary general Hadi Daryanto, who attended the meeting, said on Sunday that the “non-binding” accord was made after allegations from NGOs that the regulations imposed by the US and Australia served more as non-tariff trade barriers to curb cheap, flourishing exports from developing countries penetrating their markets, and therefore violating WTO’s anti-protectionism measures.
Hadi said Indonesia would respect the accord, but would not stop trading forestry produce with Australia and the US, the latter of which is Indonesia’s third biggest wood importers.”
Read the full article here: http://www.thejakartapost.com/news/2013/08/19/apec-agrees-isolate-us-australia-over-forestry-trade-bans.html
August 16, 2013 – Forest Ministers of the 24 APEC economies meeting in Peru have effectively isolated Australia and the United States for using trade bans to tackle illegal logging. The APEC statement on forestry follows established UN principles on forestry which promote sustainable forest management in developing countries and eschew trade bans. Continue reading
Trade, Sustainability and Development’ is a monthly newsletter that focuses on sustainable development in the developing world. It consolidates three of World Growth’s publications into a monthly newsletter, and carries World’ Growth’s mission to promote economic development through free trade and open markets.
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