Cutting corners

Despite another damning report, huge strides are being made to cut out illegal logging

IT’S THE throw away product at the end of a job. But plywood production continues to fuel crimes raging from corruption, torture and rape in the world’s most threatened rainforests.

Trees felled illegally in the tropics, often by way of despicable crimes inflicted by ruthless timber barons, are making their way into timber products being sold cheaply to the EU.

And until legislation makes it a crime to import wood products from illegal sources, then rainforests will continue to be plundered with impunity.

In August, Greenpeace stepped up its campaign for legislation to ban the import of illegal wood – claiming that the “vast majority” of the construction sector continues to use illegal and unsustainable wood.

After exposing China’s unlawful plywood trade in 2005, adding to similar damning investigations in Indonesia and Brazil, its latest report Setting a new Standard continues to use China as the whipping boy. It claims the UK construction sector continues to profit from China’s illegal operations, thus fuelling the demand for illegal wood.

The UK is Europe’s largest user of plywood, and with the construction industry accountable for 70% of all the timber used in the UK, Greenpeace says it has a central role to play in preventing illegal destruction.

A cheap habit

The industry’s love affair with a red-faced hardwood plywood (ply) is as much about habit as it is to do with cost. “There has always been an historical requirement for its use on things like hoardings,” says Steve Millward, sustainability and quality director at Jewson.

“The industry has always traditionally bought a cheap plywood product, which takes a good paint surface.”

The Greenpeace report calls for companies to use sustainable alternatives and buy timber certified under the Forest Stewardship Council (FSC). However importers and merchants alike are often tempted by the cheaper, uncertified option – particularly as credit conditions on the ground continue to tighten.

In most circumstances a certified hardwood ply can cost up to 20% more than an uncertified product.

Millward explains that it is now selling far less volumes of red-faced hardwood ply, adding that contractors are gradually turning to products like Elliottis pine, which is FSCcertified or Oriented Strand Board.

Despite the decline, he adds that there remains a demand for red-faced hardwood ply. In 2003, Jewson took the decision to stop buying the product from Indonesia and China, following the Greenpeace investigations. It now buys hardwood ply from Malaysia.

Timber procured from Malaysia, which is endorsed by the Malaysian Timber Certification Council – an independent organisation, which operates a voluntary certification scheme – is deemed to be good evidence of legality under the government’s timber procurement policy.

The Malaysian Timber Council expects the scheme to be certified under the Programme for the Endorsement of Forest Certification Schemes imminently.

Millward says that unless contractors and housebuilders stop specifying cheap red-faced hardwood ply, then UK importers will continue to cut corners. “There are loads of small independent timber businesses in the UK who will buy Chinese plywood and sell it if there is a market for it,” he says.

He adds that suppliers turning a blind eye are fuelling the problem. “Red-faced hardwood ply is a very generic industry term. It refers to a specific product and falling into that is the Malaysian, the Indonesian and the Chinese product. What [importers] try and do is come to you and say: “We’ve got a boat load of redfaced hardwood ply coming over,” and unless you say is it Chinese? Or ask what sort it is, then you’ll get what you get.”

No black and white answer

Because the timber’s origin is very often traced back to countries thousands of miles away, often the length of the supply chain is the problem.

In 2005, Greenpeace publicly shamed Wolseley for stocking Chinese plywood. Its national chain of custody manager, Jermain Cheetham, explains that the species in question Bintangor made up less than 5% of the volume of the product – but was traced back to Papua New Guinea (PNG) where concerns were raised over its legality.

“We checked it out, decided they were probably right in their assumptions so withdrew the product,” says Cheetham humbly. “I suppose the problem we have is that it was quite a long supply chain.

“We bought the product from a UK importer, but they had bought it from a mill in China. The mill in China bought the softwood core from a local source, and the species was domestic Chinese poplar, so there was no problem there, but they had bought the hardwood veneer from the veneer manufacturer, who bought the logs from Papua New Guinea.”

Cheetham says that Wolseley actually had documentation from the PNG department of trade and industry saying it had been legally traded.

Wolseley’s timber sales in the UK were nearly £150m last year. Cheetham explains that Wolseley is paying a premium on certified timber, which in the case of hardwood ply can reach up to 20%.

“We’re being penalised for doing the right thing almost,” he says. “We have now achieved Chain of Custody across our branch network. If the rest of the industry were to follow suit, obviously that would put us on a more level playing field in terms of the competition.”

He adds that there are two sources of demand for certified products. Contractors working on government contracts and larger contractors who have their own Corporate Social Responsibility programmes.

However, Jago Wadley, forest campaigner for the Environmental Investigation Agency says that there have been cases where contractors on government contracts have failed to follow the process through. “There have been some importers who have tried to buy in certified plywood to supply contractors working on government projects, but those contractors have not followed the process through,” he says.

Shake up in government procurement

Under the government’s timber procurement policy, state projects have a duty to ensure that the timber procured is from a legal source, with sustainable timber being preferred.

In August, the government’s Central Point of Expertise on Timber launched a new guidance note that will make the policy much more restrictive.

From April 2009, government departments will have to procure either legal and sustainable timber or wood licensed by the EU Action Plan for Forest Law Enforcement, Governance and Trade (FLEGT).

FLEGT creates voluntary partnership agreements between the EU and timberproducing countries to ensure exported products are verified legal and sustainable. Ghana is the first country to sign up, and is likely to be followed by Malaysia and Indonesia.

Currently FLEGT-licensed timber is not available on the market yet, but timber may be bought from a FLEGT partner country where an agreement has been signed with the EU, but where the licensing system is not yet in operation.

Similarly timber can be bought from countries that can show they’ve got a virtual FLEGT licensing system in place.

The wider scope with which government suppliers can procure timber provides a boost for the Tropical Forest Trust’s Timber Trade Action Plan (TTAP), which has been working with its members in countries such as Indonesia, and Brazil to ensure they supply certified timber.

TTAP is a seven-year project co-funded by the European Commission that supports companies in establishing a timber tracking system to trace their wood from the forest to export it to the EU.

“There was always a big concern that for probably the wrong reasons, [the new guidance] was going to be too restrictive on FLEGT,” says John White, chief executive of the Timber Trade Federation (TTF), “and it needed to include other forms of verified legal timber.

“For years the TTF and the government have been saying, ‘put your money where your mouth is, and dip into the Timber Trade Action plan funds and get yourself verified legal timber and you’ll have a market’. So this is good news.”

EU legislation

Where there seems to be agreement from every side of the campaigning NGOs is that any solution must start with legislation banning the import of illegal wood. And until then the issue is everybody’s problem. “Until the government protects consumers whether they be contractors, architects or even end users from the potential of illegal timber going into construction projects, it is everyone’s problem,” says Wadley.

“Obviously the government procurement policy has tried to incentivise the purchasing of proven legal and certified timber for the industry, but it only represents certainly less than half the wider construction industry, and it isn’t mandatory. Government contracts aside, if you’re an architect or a contractor and you want to ensure the timber is legal you have to put a lot of work into ensuring you have procured legal or certified timber.”

Last October, the European Commission announced it was preparing a forest package to stop illegal timber from entering the European market.

“We are going to have some proposals, I hope by the end of May, for the use of sustainable timber and products […] in the EU markets,” said EU environment commissioner, Stavros Dimas in March, declaring that the measures put forward would be “the best and most workable”.

Greenpeace is pushing for proposals that would include requirements like Chain of Custody for companies on the timber products they sell.

A final proposal was submitted to the vote of the 27 European commissioners in September.

White says that to be effective, the legislation must include a risk-based approach that would require companies to undertake due diligence when importing timber, thus making every effort to understand where the wood has come from. “You can certainly see within the UK legal context how over a period of time the courts would give pretty clear rulings on what constituted sufficient effort that due diligence was being done properly in a company,” says White. “You can ask questions to establish its legality – things like removal passes, tax receipts, a copy of the forest management plan. Yes it’s effort but it needs to be done.”

The road to Copenhagen

Providing the biggest boost in the war against illegal logging will be the post-Kyoto climate change treaty.

Deforestation is now recognised as one of the biggest causes of global warming – contributing to approximately 20% of global emissions.

In December last year nearly 200 delegates agreed to pilot projects that would see western countries pay the tropical countries not to deforest. With the treaty coming into force in 2012, all eyes are on the next conference in Copenhagen in December next year.

White says that any future mechanism must not only reward countries for improving deforestation rates, but must reward them for implementing sustainable forestry. “Just to say here’s some money to stop doing it isn’t going to help that much,” he says. “If you want to put some economic sustainability into this, then these countries need to recognise the value of sustainable forestry. So rather than just getting money for not chopping down their trees, they actually get money for chopping down their trees in a sustainable way.”

In any event, it appears as if the war on illegal timber is swaying, with genuine strides now being made to ensure no illegal timber enters the UK. But that’s just half the problem. The EU generally does not import a lot of illegal timber therefore the impact on the trade, even if stopped would be marginal. “This is a global problem,” says White. “And these things don’t just change over night, but we are continuing in the right direction.”