FORESTS UPDATE: US-INDONESIA, JAPAN AND PHILIPPINES

US, Indonesia Launch Landmark Talks On Illegal Logging

The US government announced on 4 April that it was launching the first-ever agreement to facilitate bilateral cooperation to combat illegal logging under President George Bush's global initiative to address illegal logging set up in 2003. Meeting on 4 April, US Trade Representative Rob Portman and Indonesia's Minister of Trade Mari Pangestu agreed to build on the US-Indonesia Trade and Investment Framework Agreement (TIFA), a bilateral trade deal, to "broaden" the economic relationship established by the TIFA's tariff reductions on trade by creating a scheme to support more sustainable timber trade through measures to combat illegal logging. "This is a unique opportunity to strengthen our cooperation with Indonesia to better protect Indonesia's parks, forests and sensitive habitats from illegal logging," Portman said. The launching of talks represents the first time that the US has engaged in a bilateral deal on illegal logging, while the EU has for some time now been holding talks with several of its trading partners under its forest law enforcement, governance and trade (FLEGT) programme. While the details of the eventual US-Indonesia agreement remain murky, including how US imports of forest products from Indonesia would be used to discourage illegal logging, negotiators said they were interested in concluding talks as soon as possible. The US noted that it was focusing its preliminary efforts to combat illegal logging on Indonesia because its "forests and their biodiversity present a significant conservation opportunity". Nearly 80 percent of Indonesian timber harvesting is illegal with devastating biodiversity and developmental impacts. In its press release, the US said the pact would "build on existing Indonesian efforts to combat illegal logging in the forest sector" and help ensure continued access of legally produced Indonesian forest products to the US market.

Japanese Public Procurement Policy Enters Into Force

A government procurement policy requiring all forest goods and services purchased by the state to be harvested in a legal and sustainable manner came into effect in Japan on 1 April. The policy, adopted under the "Law Concerning the Promotion of the Procurement of Eco-Friendly Goods and Services by the State and Other Entities", requires that all timber bought should have been harvested in a legal manner consistent with procedures in the forest laws of timber producing countries and harvested from forests under sustainable management. The guidelines issued to accompany the policy notification include indicative ways in which importers can verify that products are legal and sustainably produced, namely proof of forest certification and chain of custody; industry verification; or a company-determined method of verification. Public procurement policies designed to block imports of illegally harvested timber have been adopted in the UK, Norway and Sweden, while Germany is in the process of developing its own. While environmental critics suggest these laws do not go far enough in preventing trans-shipment of illegally harvested timber through third countries that do processing, some forest producers in developing countries have criticised the proliferation of different import requirements and the costs that are involved as non-tariff barriers to their exports. Japan is a member of the plurilateral WTO Government Procurement Agreement, according to which it must treat all foreign companies the same as one another and the same as domestic companies when making public purchases.

Filipino Region Imposes Logging Ban: NGO Caution WTO Implications

The Autonomous Region in Muslim Mindanao (ARMM) in the Philippines imposed a ban on all logging activities at the end of March to protect the region's remaining forests and prevent floods that have been attributed to illegal logging activities. ARMM Governor Datu Zaldy Ampatuan told the Department of Environment and Natural Resources (DENR) to revoke logging permits in the region after the army seized a large cargo of illegally logged timber being smuggled out of the region. The order, which was justified by Article 10(5) of the Republic Act 9054, imposes a total logging ban including cancelling, nullifying and voiding all forest concessions, licenses contracts and agreements, and allows the export of forest products from the region only if the exporting company can prove it is using logs from Malaysia or Indonesia.

In a recent interview, Third World Network's Chee Yoke Ling suggested that current negotiations at the WTO on non-tariff barriers to trade must take into account that some barriers, including timber logging and export bans, might have positive sustainable development impacts. Taking the example of Malaysia, she noted that as a result of debates about unsustainable logging and its relation to the loss of the countries' "very rich biodiversity", some countries "come to a point when they may want to ban the exports of logs and control the amount they want to exploit in the forest" and as a result "put trade restrictions in terms of exports of raw logs". Many developing countries use logging and export bans to conserve their forest resources or promote value-added processing, including Tanzania (see Bridges Trade BioRes, 17 February 2006) and Kenya, which has had a logging ban in place since 1999. Under the WTO's Non-Agricultural Market Access Negotiations, Japan in July 2005 suggested that export bans, restrictions, taxes and levies on forest products were WTO-incompliant barriers to trade (TN/MA/W/46/Add.7/Rev.1), but negotiations continue on how the negotiations should deal with the subject.

For more information on US work on illegal logging, visit http://www.whitehouse.gov/infocus/illegal-logging/

For the notification and guidelines for the Japanese public procurement policy, visit http://www.illegal-logging.info/documents.php#321

ICTSD Reporting; "USTR Portman and Indonesia Trade Minister Pangestu Launch Negotiations on Landmark Illegal Logging Initiative," USTR, 4 April 2006; "US, Indonesia Launch Talks to Curb Illegal Logging," REUTERS, 5 April 2006; "Opening up to worries," SUN2SURF, 13 April 2006; "Mindanao imposes total logging ban," ITTO TROPICAL TIMBER MARKET REPORT, 1 April 2006.