Illegal logging legislation
As the representative trade association of one of the world’s largest hardwood exporting industries, AHEC has a considerable stake in on-going international policy discussions designed to eradicate illegal wood from trade. Research undertaken for the American Forest and Paper Association (AF&PA) in 2004 suggested that as much as 23% of hardwood lumber that enters international trade might be considered suspicious. It also suggested that illegal material depresses world prices by between 7% and 16% on average and that in certain important markets the availability of illegal wood significantly affects the ability of U.S. producers to export.
Therefore AHEC has a significant interest in promoting policy measures that are effective and efficient in removing illegal wood from trade. AHEC supports the major multilateral process known as the Forest Law Enforcement and Governance (FLEG) process, which originally emerged from a G8 Action Programme on Forests and which has been on-going since 2001. Through its membership of the U.S. Hardwood Federation, AHEC supported passage of an amendment to the U.S. Lacey Act in May 2008 which makes it an offence within the U.S. to possess any plant (excluding agricultural crops but including wood and derivative products) "taken, possessed, transported, or sold" in violation of any relevant foreign or state law.
The Lacey Act amendment encourages a risk based approach to timber procurement within the U.S. timber trade and industry. A key strength of the law is that it does not dictate mechanisms and procedures by which legality may be demonstrated or impose unnecessary new controls on suppliers in regions where the existing legal framework is effective. Instead the law puts pressure on U.S. trading companies to show due care and to take reasonable measures to monitor supply chains. Companies now have a strong incentive to assess their suppliers and to determine where there may be a significant risk of illegal activity. They must take appropriate action based on this risk assessment – for example by demanding independently certified wood from countries where there is a high risk of illegal activity, while imposing lesser requirements on low risk suppliers.
AHEC has also engaged in discussions on proposals to introduce similar legislation in the European Union. The EU legislative proposal, expected to be introduced into law during 2010, would impose mandatory requirements on companies that “first place” forest products on the EU market to implement a “due diligence” system to minimise the risk of illegal wood entering the EU. The law is not expected to require European regulatory authorities to capture or monitor individual shipments to ensure they are legal. Instead it would focus on ensuring that EU timber trading and manufacturing companies have effective management systems to reduce the risk of trade in illegal wood. The proposed legislation would not impose requirements for traceability and certification on imported wood products considered low risk from the perspective of illegal wood supply. However such measures may be required for “high risk” wood products.
AHEC’s commissioning of the Seneca Creek risk assessment study is an appropriate response to these legislative initiatives. The study demonstrates that there is less than a 1% risk of any illegal wood entering the U.S. hardwood supply chain. Even the most rigorous tracking and chain of custody systems would be hard pressed to provide an assurance of legality with such a high level of confidence. The results of the Seneca Creek study mean that companies throughout the wood supply chain can continue to deal in U.S. hardwoods confident in the knowledge that they are fully conformant to the new U.S. and European legislation.