Office of the Minister of Forestry

Chair

Cabinet Policy Committee

New Zealand Policy to Address Illegal Logging and Associated Trade

Proposal

  1. I seek Cabinet’s approval to implement a package of actions as part of a New Zealand approach to help address illegal logging and associated trade. In February 2006, Cabinet approved the release of a public consultation discussion document [CBC Min (06) 3/10]. Officials were invited to report back on the outcomes of that consultation. This paper fulfils the requirements of that report back, and proposes recommendations for a comprehensive New Zealand policy on illegal logging and associated trade.

Executive Summary

  1. Illegal logging (including associated trade in timber and wood products from illegal logging) has attracted increasing international attention over the last ten years and is now a key area of dialogue in international forestry and environmental forums. There is widespread concern about its linkages to ineffective governance, social conflict, violence and its negative impacts on forest ecosystems and biodiversity. Illegal logging is also a significant economic and trade issue.
  2. This paper builds on public consultation carried out in the first half of 2006 and subsequent analysis carried out by officials on potential action points and key themes raised by stakeholders. It aims to present a cohesive New Zealand policy to help address illegal logging.
  3. The proposed five overarching goals of the policy represent the long-term aspirational direction of the policy. They are:
  • Appropriate and effective mechanisms at the global level which support practical solutions to the problem of illegal logging and associated trade.
  • Coordinated and effective approaches at a regional level to combat illegal logging and associated trade.
  • Effective bilateral engagement, including appropriate assistance with the development of accountable environmental governance and sustainable management of forest resources, which addresses illegal logging.
  • Government demonstrates a leadership role in buying legal and sustainably produced timber and wood products.
  • Awareness and action amongst New Zealand producers, suppliers and consumers contributes to addressing illegal logging.
  1. The following objectives underpin the proposed goals of the policy:
  • Champion the issue of illegal logging as a key focus point for international discussion and action.
  • Increase Pacific country engagement on, and awareness of, illegal logging issues.
  • Support regional cooperation on monitoring and tracking of timber and wood products to address illegal logging.
  • Develop bilateral arrangements that seek to address illegal logging.
  • Provide strong Government leadership through a credible and enforced procurement policy that makes it mandatory for government departments to seek legally produced timber and wood products, including paper, and where available, sustainably produced products.
  • Encourage stronger public and private sector awareness and action through enhanced communication; development of identification mechanisms for legal products; and increased understanding of environmental, economic and social effects of the problem.
  1. A variety of operational actions are included in this paper under each objective. These focus on practical efforts. A number of short-term and long-term actions have been selected to ensure continued momentum in the implementation of policy actions.
  2. The complex nature of the problem of illegal logging means that effectively combating the problem is a long-term and difficult goal. However, the rewards for New Zealand from both an environmental and economic view are considerable. It is also apparent that achieving international sustainable forest management is dependent on being able to first develop, implement and enforce forestry and related trade laws.
  3. I recommend instructing officials to report to Cabinet by June 2007 on practicalities and feasibility of a regulatory requirement for supplier’s declaration of conformity with legality on the sale of timber and wood products. I recommend officials report to the Minister of Forestry, Minister of Conservation, Minister of Foreign Affairs and the Minister of Trade by June 2007 on a New Zealand strategy for international, regional and bilateral engagement to address illegal logging and associated trade based on the goals and objectives of this policy.

Background

  1. In 2004 the Minister of Conservation highlighted New Zealand’s concern about illegal logging in bilateral talks and in the high level segment of the Seventh Conference of the Parties of the Convention on Biological Diversity. The Minister of Forestry agreed to the development of a comprehensive illegal logging policy in May 2005.
  2. Illegal logging takes place when timber is harvested, transported, bought or sold in violation of national laws. Reasons for New Zealand to be engaged actively in helping to address this problem include significant trade, environment, economic and social interests, both from domestic and wider regional and international perspectives. These were outlined to Cabinet in February 2006 [CAB(06)23].
  3. Globally, illegal forestry practices are said to depress world timber prices on average by 7% to 16%.[1] In Australia, estimates show that each year illegal logging impacts on around AUD400 million of Australia’s forest products and wooden furniture imports (9% of the total imports). Estimates for illegal logging in the Asia-Pacific region amount to as much 120 million cubic metres (m3) or about 45% of the recorded total production per year[2]. New Zealand producers have to compete in this uneven playing field, both overseas and in New Zealand. In key markets, such as China, New Zealand log exporters compete in a market in which up to 35% of log imports are considered suspect[3]. 
  4. This paper builds on public consultation undertaken in the first half of 2006. Feedback on the 2006 discussion paper revealed a range of responses to the challenges of addressing illegal logging. There was widespread support for action. Five common themes emerged from stakeholder consultation. These were:
  • A need for Government to lead by example through an effective and visible Timber Procurement Policy, requiring Government to purchase only legal and sustainable timber and wood products;
  • The desire for New Zealand to take a leadership role in developing mechanisms to address illegal logging, including introducing a unilateral ban on all imports of illegal timber and wood products entering the country;
  • The belief that New Zealand producers could not compete fairly with cheaply produced and possibly illegally-harvested timber and wood products because of strict domestic environmental regulations;
  • The need for action-orientated engagement, both domestically and internationally;
  • A desire for stakeholders to be involved and consulted in policy development and implementation.
  1. A significant issue also raised in consultations was the relationship between sustainable forest management (SFM) and legality. There was much discussion on whether the overall goal of any policy should be focused on SFM rather than legality. This policy focuses on goals, objectives and action points that help to address illegal logging. This is a deliberate attempt to separate legality and sustainability issues. This does not replace a wider need to engage on progressing SFM outcomes. There is a realisation, however, that gaining practical action on SFM internationally is difficult in the face of an inability to develop and enforce forestry laws and successfully exclude illegal production and trade from the marketplace.
  2. Stakeholders voiced strongly their desire for something tangible to be implemented which identified and excluded illegally-sourced timber and wood products. Many, but not all stakeholders called for the Government to impose an import ban on all timber and wood products entering the country which could not be proved to be legally-sourced. Some stakeholders also wanted this to extend to products that could not satisfy criteria for sustainability.
  3. After stakeholder consultations, the Minister of Forestry and the Minister of Trade were briefed in further detail on this particular issue. Analysis showed that implementing a unilateral ban, from an operational perspective, would be very difficult. It would also be likely to be looked upon unfavourably by trading partners and be potentially non-compliant with WTO obligations. This policy does provide opportunities for addressing imports of illegally-sourced timber and wood products through multilateral, regional and bilateral approaches to addressing illegal logging. Also, officials will report back on the practicality and feasibility of introducing a supplier's declaration of conformity with legality on timber and wood products sold in New Zealand.
  4. The following principles have been used to guide the development of the package:
  • A focus on legality, with legality defined as the laws of the country of origin;
  • Action-orientated approaches to address illegal logging;
  • Maximising synergies with existing foreign and domestic policy;
  • Feasibility, including consistency with international obligations; and
  • Practicality, taking into account resources and costs.

[1] “Illegal” Logging and Global Wood Markets: The Competitive Impacts on the U.S. Wood Products Industry (2004).

[2] Mir J Fraser A Illegal logging in the Asia-Pacific region: an ADB perspective In International Forestry Review 5 (3), 2003: 279

[3] “Illegal” Logging and Global Wood Markets: The Competitive Impacts on the U.S. Wood Products Industry (2004).

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Senior Policy Analyst
International Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND

Phone: +64 4 894 0650
Fax: +64 4 894 0742

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