Malaysian Loggers Try to Improve Their Image

Liz Gooch, New York Times 9 Apr 10;

TEMERLOH, MALAYSIA — Huge meranti tree trunks, many of them destined for faraway shores, are piled up high along the road in this town about a two-hour drive northeast of Kuala Lumpur, awaiting their date with the saw.

Steps away, inside the Maran Road Sawmill workers nimbly slice lengths of timber into thinner strips, adding to the blanket of ochre dust beneath them.

All the logs have numbers scrawled on their ends, indicating the area they came from, plus the sawmill’s license number — assuring buyers that the wood was harvested legally and could be traced to its source.

As band saws droned on a recent Friday, the mill director, Ng Kay Yip, ushered a potential customer from the Netherlands around the facility, explaining how the trees had been harvested and showing him the nearby factory, where the timber is planed into semifinished pieces for windows and doors.

Europe is already an important export market for the company, but Mr. Ng and others in the timber industry here are hoping that even more traders from Europe will soon knock on their doors. Malaysia is working to become the first country in Asia to sign a voluntary agreement with the European Union guaranteeing that all timber exports to the bloc have been harvested legally.

The Union says the agreement is likely to give Malaysia, and other countries that sign similar pacts, a competitive advantage as the bloc pushes for tighter regulation of timber imports because of environmental concerns. Last year, countries in the 27-member Union imported wood, wood charcoal and cork worth an estimated €8.5 billion, or $11.4 billion, 4.6 percent of it from Malaysia.

Uncontrolled logging can destroy animal habitats, cause erosion and increase the risk of natural disasters like floods and landslides, contribute to deforestation and climate change, and deprive governments of tax revenue. A report by the World Wide Fund For Nature estimated that illegally harvested timber accounted for as much as 19 percent of the Union’s wood imports in 2006, with Russia and Indonesia the main culprits.

The Union has no region-wide law preventing the importation of illegally logged wood products, although in response to consumer demand, some companies voluntarily buy timber from sources certified by various groups as sustainable. The Union is considering legislation that would require all importers in the bloc — from furniture companies to those buying raw materials like boards — to conduct due diligence to show that the timber they bought had been legally harvested.

A draft of the measure being negotiated in Brussels says importers would have to know the origin of timber and take steps to minimize the risk that it was illegally harvested.

Companies importing from countries that have signed a voluntary partnership agreement, like the one being negotiated with Malaysia, would be given a “green lane” for entry into E.U. markets and would be exempt from further checks. “There’s no doubt that this will create an advantage for the timber traders on the E.U. market,” said Vincent Piket, head of the Union’s delegation to Malaysia.

Under its Forest Law Enforcement, Governance and Trade action plan, the bloc has already signed agreements with Ghana, the Republic of Congo and Cameroon. In addition to Malaysia, negotiations are under way with Indonesia, the Central African Republic, the Democratic Republic of Congo, Gabon and Liberia. The Union has not begun negotiations on an agreement with China — the biggest exporter of timber to the Union — but the two sides signed a cooperation pact last year that was intended to reduce unlawful logging and trade in illegal timber.

Under the voluntary partnership agreements, source countries are responsible for determining that the timber has been harvested according to their national laws and the criteria in the E.U. agreements. While the agreements may vary among countries, requirements typically include that trees not be cut from protected forests, that endangered species not be logged and that companies comply with trade and customs regulations.

A third-party monitor, like an independent auditing company, would conduct spot checks to ensure compliance.

Whether such agreements will significantly decrease illegal logging, however, remains to be seen.

“It’s a very positive step, the idea of introducing these structural changes by requiring companies to use control systems, but we believe that it’s not enough,” Sebastien Risso, forest policy director at Greenpeace’s European Unit, said by telephone from Brussels.

Companies should be compelled to show a product’s complete chain of custody, he said, documenting its journey from the forest to its final destination.

Rupert Oliver, director of Forest Industries Intelligence, a British consulting company, said the proposed Union legislation could result in the sale of illegal timber to other countries that lack strict rules on timber imports, like China and India.

“It doesn’t really get to the root cause of the problem,” he said. “It shifts the problem elsewhere.”

Mr. Oliver added that the proposed Union legislation was not as tough as the U.S. law known as the Lacey Act, under which companies can be criminally prosecuted for importing illegal timber. The draft E.U. law does not stipulate the level of penalties to be imposed on those involved in importing illegal timber, leaving it to the member states to determine the penalties.

Ivy Wong Abdullah, forest conservation senior manager at WWF Malaysia, said that no statistics were available on the extent of illegal logging in Malaysia but that “sporadic instances” were still being detected. For example, just last month, the authorities discovered hundreds of fallen trees in a suspected case of illegal logging on the border of Perak and Pahang States, the Malaysian national news agency, Bernama, reported.

Ms. Wong Abdullah said that while Malaysia had strong laws against illegal logging, “there’s a need for more enforcement personnel on the ground.”

Malaysia’s timber industry already has several voluntary programs for certifying that timber is legally and sustainably harvested, with sawmills and other businesses participating to make their products more appealing to buyers concerned about environmental issues. Once the pact with the E.U. is signed, all timber companies will be compelled to comply with the criteria.

Saskia Ozinga, the campaign coordinator at FERN, a Brussels-based nongovernment organization that monitors E.U. forest policies, said there had been some resistance to the agreement from Sarawak State in Malaysia over a requirement that the land rights of indigenous people be respected.

While the Malaysian authorities say that the industry still has some concerns that need to be resolved, both the Union and Malaysia expect to sign the agreement this year.

Malaysian environmental groups have welcomed the proposed agreement but say sustainability issues as well as legal ones must be addressed.

Ms. Wong Abdullah said that while some of the current voluntary certification systems require operators to address sustainability issues, including assessment of an area’s conservation value, the draft E.U. agreement focused on the “bare legal minimum” requirements for logging in Malaysia.

Europe is Malaysia’s second-largest timber export market after Japan, with 2.67 billion ringgit, or $834 million, in sales of timber and timber products in 2009. Furniture, sawn timber, moldings, plywood, doors and flooring materials are among the main exports. Meranti, the timber at the Temerloh mill, is an important hardwood that grows in the tropical forests of Asia and is used in light construction and veneers

Jalaluddin Harun, director general of the Malaysian Timber Industry Board, said Malaysia was committed to fighting illegal logging and had decided to pursue the agreement with Europe to ensure that timber traders continue to have unhindered access to E.U. buyers.

“We want to ensure that our timber continues to be exported without having to be re-evaluated,” he said. “In Malaysia we would like to have the image of selling or trading in legal timber.”