15th March 2021
In this issue of our EUTR Newsletter, we provide an update on the operation of the EU law to address illegal logging, the EU Timber Regulation (EUTR), from December 2020 to February 2021. As with all of our previous editions, this issue will include information on what both the European Commission and EU Member States are doing to ensure the proper application of the EUTR, and provide updates on similar legislation internationally.
We are pleased to inform you that, in addition to our regular Newsletter sections, we will now also provide you with a new feature: a section where we identify an important and topical EUTR-related issue and provide a brief legal analysis of it for your information.
Over the years of investigating the functioning of the EUTR across the EU, we have observed many cases of uneven and erroneous approaches towards this regulation. The reason behind this being multilayered – competent authorities struggling with understaffing and consequent shortcoming in expertise, timber operators without sufficient knowledge to develop a well-functioning due diligence system, and civil societies deprived of sufficient access to information about the current state of play of efforts to tackle illegal logging. All these factors significantly affect the potential of the EUTR and undermine the collective efforts to halt the illicit timber trade.
Having noted some of the most recurring questions concerning the implementation and enforcement of the EUTR, but also keeping in mind the basic elements of the EUTR that are still causing some ambiguities, we are launching a series of short analyses aimed at providing the relevant stakeholders with substantive knowledge of the EUTR, and thus – at enhancing their response to the illegal timber trade.
If you have any updates to share that we could include in the next newsletter, any queries regarding the EUTR implementation or enforcement that you would like us to address in the next release, or if you would like to receive this newsletter by email, please contact us on: email@example.com
EUTR country overview for the ROC
On 7 December 2020, the European Commission published a new EUTR country overview for the Republic of the Congo. Contracted by the European Commission, the overviews are being developed by UNEP-WCMC. Overviews of timber-producing countries can be found here.
Expert Group/Multi-Stakeholder Platform on Protecting and Restoring the World’s Forests (EUTR and the FLEGT Regulation)
On 10 December 2020, the Commission’s Multi-Stakeholder Platform on Protecting and Restoring the World’s Forests, focusing on the EUTR and the FLEGT Regulation, held its second meeting. The participants were presented with a variety of topics, including an update on the implementation of the Communication on ‘Stepping up EU Action to Protect and Restore the World's Forests’ and the ongoing fitness check of the EUTR and the FLEGT Regulation. A summary of the meeting is available here.
On 23 February 2021, the Platform held its third meeting and continued discussing the fitness check of the EUTR and the FLEGT Regulation, along with the ongoing study on certification and verification schemes in the forest sector and for wood-based products developed by Preferred by Nature (formerly NEPCon), a new Earthsight report revealing illegal timber imports from Russia, and the current situation in Myanmar presented by EIA.
The European Commission's study on certification and verification schemes in the forest sector and for wood-based products
On 23 January 2021, Preferred by Nature (formerly NEPCon) opened a consultation for the draft certification schemes assessment reports, ending on 5 February 2020. Stakeholders had the opportunity to contribute to the study on certification and verification schemes in the forest sector and for wood-based products. This project, launched by the European Commission and contracted to Preferred by Nature, aims at providing an overview of the certification market in the forestry sector, with regards to the ability of the certification schemes to meet the obligations of the EUTR. More about the process can be found here.
A new Earthsight report reveals illegal timber imports from Russia
A new Earthsight investigation has revealed large amounts of illegal timber from Russian taiga forests entering the EU market. The report finds that one of the leading Russian timber companies, BM Group, sold the illegally harvested timber to companies from Germany, but also from Estonia, France, Belgium, Sweden, Latvia, Slovakia, Czech Republic, Denmark, Lithuania, and Austria. Published on 16 December 2020, the full report can be found here.
EIA’s statement on the political situation in Myanmar
On 3 February 2021, the Myanmar Forest Product and Timber Merchants Association (MFPTMA) – a state-owned forestry company in Myanmar, issued a letter, claiming the compliance of Myanmar timber with applicable laws and the imports of this timber being in line with the obligations of the EUTR. In a response to this letter, EIA has published a statement, vocally opposing the military coup of early February 2021 and refusing to support any trade in timber and timber products originating from Myanmar.
Series of online training webinars for timber operators
Preferred by Nature (formerly NEPCon), with the support of the EU LIFE Programme, is organizing a series of free-of-charge webinars to help companies better implement EUTR requirements. The webinars were conducted in Dutch (2 and 4 March 2021), English (24 and 26 February 2021), French (3 and 5 March 2021), and German (23 and 25 February 2021), with an additional webinar planned to take place for UK-based companies to update them on the requirements of the EUTR and the United Kingdom’s Timber Regulation (24 and 25 March 2021).
EUTR test for timber operators
On 19 February 2021, Preferred by Nature (formerly NEPCon) introduced a tool that aims to help timber operators find out whether they are subject to EUTR requirements.
EIA’s recommendations for the EU Timber Regulation ‘Fitness Check’
On 22 February 2021, EIA has published a report including recommendations for the EUTR, submitted to the Commission in the course of its ongoing Fitness Check. The report entitled ‘Does Well, Could Do Better’ can be found here.
In each edition of our Newsletter, this section will contain a short analysis by ClientEarth of an important and topical EUTR implementation issue. In the current edition, we provide an analysis of what we feel at ClientEarth has been either forgotten or not sufficiently tackled in the EUTR in the context of the Commission’s ongoing fitness check of the EU’s rules on illegal logging, along with a short explanatory comment on the fitness check process itself.
Please note that the content of the following analysis represents the views of ClientEarth only and is its sole responsibility. It does not reflect the views of the European Commission, nor any other official entity or organisation mentioned therein.
On 3 September 2020, the Commission launched a public consultation in the context of the ongoing fitness check (or evaluation) of the EU’s legal arsenal against illegal logging – the EUTR and the FLEGT Regulation. This consultation was part of the wider Fitness Check, begun by the European Commission in early 2020. The aim of this process was to provide the concerned public and relevant stakeholders with an opportunity to express their views of the functioning and impact of these regulations, and to help the Commission in drafting their impact assessment of both regulations, assessing whether these are still fit for purpose.
The results of the Fitness Check are supposed to give a comprehensive overview of high and low points of the current shape of anti-logging laws, allowing the Commission to scope the areas for potential improvement. The results are also intended to contribute to the parallel study on demand-side measures against deforestation associated with products and commodities placed on the EU market. While stakeholders are still waiting for the Commission’s final report of the Fitness Check (due in Q2 2021) along with (potential) proposals for change, we provide below a short summary of ClientEarth’s position on the major concerns related to the implementation and enforcement of the EUTR.
Our main concerns regarding the implementation and enforcement of the EUTR
Although the EUTR has been in force since 2013, many Member States have yet to develop sufficient organisational capacity that would allow the application of the EUTR in the fullest possible and most effective way. The reports submitted by Member States to the Commission clearly show that many Competent Authorities are lacking in both personnel and financial resources, with most of the countries having less than 20 people each working on the EUTR and at least 10 of them having no specific budget for implementation and enforcement of this regulation.
The understaffing and underfinancing of Competent Authorities directly affect the scope and quality of operations carried out on the basis of the EUTR, particularly in the field of control and monitoring obligations. While the exact number of compliance checks conducted over a period of years is difficult to provide due to differences in reporting methodologies, the estimated number remains low, reaching in 2019 a total of 9300 checks conducted on operators in all Member States. With the number of operators in the EU estimated by the Commission to exceed 3 million, this extremely low monitoring ratio (0.31%) emerges as one of the major EUTR enforcement issues that need to be addressed. Alongside the issue of checks on operators, traders and monitoring organizations, who also have obligations under the EUTR, are very rarely subject to control.
Additionally, national laws determining the procedural rules of checks by Competent Authorities, including the criteria to be considered in developing risk-based plans for checks, differ between Member States. The same inconsistencies apply to the criteria applied by Member States in assessing the relevance of information submitted in substantiated concerns, which are meant to be able to trigger unplanned checks by Competent Authorities.
Unfortunately, while substantiated concerns seem to be an effective EUTR mechanism aiming at both identifying illegal timber and supporting understaffed Competent Authorities, many countries lack provisions or detailed guidance on the appropriate procedure for submitting and handling substantiated concerns. As a consequence, the enforcement activities of Competent Authorities provide uneven outcomes in terms of quality and accuracy, undermining both the effectiveness of the control obligations and efforts towards leveling the playing field amongst timber operators but also weakening the grounds for public participation in EUTR enforcement.
Effective action against the continued placing of illegal timber on the EU market comprises of compliance checks and subsequent enforcement actions. In this context, Member States are obliged to adopt and enforce penalties that are 'effective, proportionate and dissuasive'. However, despite the existence of penalty regimes in national laws (and the related differences emerging across Member States), the sanctions actually imposed are often relatively low compared to the maximum levels that are theoretically available. Thus, we consider that penalties for infringements of the EUTR do not represent enough of a threat to a company's operation – for some operators, breaching the law can be clearly more economically viable than obeying it.
ClientEarth’s full response to the public consultation can be read here. The paper includes both remarks concerning the EUTR and FLEGT Regulation along with recommendations for improvement. To follow the official process of the fitness check, please visit this website run by the European Commission.
In December 2020, we prepared and published on our website our EUTR Newsletter covering the period from September to November 2020. However, it has come to our attention that, due to an unfortunate technical error, we were unable to disseminate that edition of the newsletter to our mailing list in our usual manner. We would like to apologise for any inconvenience caused by this error and, for your information, provide a link to that edition of the newsletter here.