Illegal logging and the subsequent trade of illegal timber undermines social equity, environmental conservation, sustainable development and economic growth in many countries around the world.
The World Bank reports, illegal logging costs developing countries over $10 billion in lost assets and revenues every year. With a significant proportion of global wood trade estimated to be illegal, illegal logging also undermines the legitimate forestry sector by creating unfair competition with undervalued products. In 2004 it was estimated through trade simulation models that illegal logging depressed the average price of forest products by 7-16%.
The scale and extent of illegal logging within the forest sector varies widely among countries. In many cases illegal logging has been linked to a variety of socio-political and economic failures. Some of the world’s most forest-rich countries have weak forest governance, which is marked by flawed policies and legal frameworks.
Over the past ten years, a number of initiatives have attempted to address the “demand side” drivers believed to be fuelling illegal logging. A number of regional FLEG (Forest Law Enforcement and Governance) processes have been initiated in different parts of the world to further advance political awareness and commitment to combating illegal logging and to develop transnational, collaborative solutions. Furthermore, a number of importing countries are in the process of or have adopted legislation aimed at eliminating the importation of illegally harvested wood and wood products.
For instance, in 2008 the US Congress amended a piece of legislation, the Lacey Act, to prohibit the importation of illegal wood products. In the EU, through the FLEGT action plan, bilateral Voluntary Partnership Agreements (VPAs) are being signed by major tropical producer countries and the EU, to establish cooperation addressing causes of illegal logging and to develop systems to ensure the trade of legal products. Additionally, EU proposed Due Diligence Legislation seeks to put in place requirements for importers and producers placing timber on the EU market.
PEFC Certification & Illegal Logging
Market-based mechanisms like forest certification and verification of legality offer assurances about the legality of forest products to customers throughout the supply chain.
PEFC Chain of Custody certification, including its requirements on non-controversial sources, is designed to prevent illegal wood from entering the production chain. Third party auditing to verify system integrity provides assurances that PEFC-certified products entering the marketplace are not from illegal wood sources.
For companies, chain of custody certification is an important risk management tool as it demonstrates that they are taking their responsibility and commitment to legal wood procurement seriously.