Bridges Trade BioRes • Volume 8 • Number 16 • 19th September 2008

EU-Ghana Trade Deal Takes Aim at Illegal Logging

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The EU and Ghana clinched a deal last week aimed at reducing illegal timber harvesting in the forested West African nation. The agreement was signed on 3 September on the sidelines of a foreign aid conference in Accra, Ghana. The deal is the first of what Brussels hopes will be a series of so-called Voluntary Partnership Agreements (VPAs) with timber-producing developing countries.

Under the terms of the pact, Ghana is obliged to establish a transparent licensing scheme for EU-bound timber exports that certifies that all of the goods have been legally harvested. The deal also compels the EU to establish a system that ensures that uncertified Ghanaian timber is not able to be enter the market. More broadly, the deal is also intended to promote better enforcement of forest law and has been designed to facilitate active involvement by both civil society and the private sector.

One aim of the deal is to provide Ghanaian timber with a competitive advantage due to their perceived environmental benefits. Because more than half of Ghanaian timber exports end up in the European market, the new deal could have a significant impact.

Agreements do not affect WTO commitments

The Ghana deal, along with other potential VPAs, do not violate world trade rules because the deals are both voluntary and bilateral. While the EU is also currently engaged in VPA negotiations with Cameroon, Indonesia, the Republic of Congo (Brazzaville), and Malaysia, the inking of the Ghana deal marks the first time a VPA has been finalised since the initiative was proposed in 2003.

VPAs lie at the core of the European Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan, the EU’s response to a call for action at the 2002 World Summit on Sustainable Development in Johannesburg, South Africa. Beyond VPAs, Brussels promised to require EU member states to purchase sustainable forest products, and to introduce a legislative measure discouraging the importation of wood from unknown – and thus, potentially illegal — sources.

Environmentalists cautiously optimistic

Ghanaian timber exports bring US$ 400 million to the domestic economy, making it the fourth largest industry after gold, tourism and cocoa. But logging practises in the country have been widely criticised as unsustainable and illegal harvesting is rampant. The World Bank estimates that roughly 60 percent of logging in Ghana in recent years has been conducted in contravention of domestic legislation. And Ghana’s tropical forest cover has been reduced from 63,400 square kilometres in 1960 down to about 13,500 square kilometres today – a 25 percent decline.

Because there is currently no EU law preventing illegally harvested wood from entering the European market, environmentalists are cautiously optimistic about voluntary agreements, like the EU-Ghana VPA.

“For many years, Europe has talked the talk of saving the world’s forests but demanded increasing volumes of cheap wood imports, providing profitable markets for illegal wood from very poor countries,” says Ralph Ridder, a FLEGT expert at the European Forest Institute (EFI). “Once implemented, this agreement will mean that buying wood from Ghana ensures that consumers, industry, and government in the EU are doing the right thing.”

In order to ensure proper certification is carried out, the VPA calls for a system of checks and balances that will be verified by a third party. “There will be a verification and tracking system for timber,” said Jaap Vermaat, an advisor for the European Commission. “As a safeguard, Ghana has agreed to have an independent monitor assess their systems on a regular basis.”

Loophole still needs closing

But some say that, while the EU-Ghana deal is a promising first step in the fight against illegal logging, it is no magic bullet.

At least initially, the VPA will cover a rather limited range of products: logs, sawn wood, plywood, and veneer. Furniture and other processed wood products will not be regulated by the agreement. And because the agreement with Ghana is bilateral, it will not be able to prevent the export of illegal timber to a non-EU country, where raw logs could be processed, then re-exported to the European market.

Critics argue that this phenomenon, called ‘transhipment,’ has the potential to be quite significant, as illegal loggers could simply divert their shipments to non-EU markets and completely circumvent the certification process. Thus, they say, in order to be truly effective at combating illegal logging on a global scale, all major timber-importing countries would need to establish similar agreements with producer countries.

Moreover, the bilateral trade deals will have no impact on timber that never crosses an international border. The vast majority of timber harvested within a country ends up in the hands of domestic consumers, according to FAO statistics.

But the EU maintains that the transhipment issue has been overstated in light of the potential positive spill-over effects associated with the capacity-building support that the EU has promised will accompany the agreement. Specifically, Brussels argues that EU-funded governance mechanisms will help the Ghanaian government crack down on all illegal logging within its borders, regardless of the ultimate destination of the timber.

Other critics of the program point out that the vast majority of illegally harvested timber does not originate in potential partner countries. The World Wide Fund for Nature estimates that as much as 20 per cent of timber imports to the EU come from illegal or suspected illegal sources – mainly from Russia, China, and Indonesia. They say that the Ghana deal and similar VPAs will likely stop only 10 percent of illegal imports, and that more efforts should be made to tackle the transhipment issue and striking deals with Russia and China – talks with Indonesia are currently underway.

Further deals in the works

In addition to the ongoing negotiations with Cameroon, Congo-Brazzaville, Indonesia, and Malaysia, informal VPA discussions have also begun with Central African Republic, Cote D’Ivoire, Democratic Republic of Congo, Ecuador, Gabon, Honduras, Liberia, Nicaragua, and Vietnam.

The negotiations with Malaysia appear to be moving ahead briskly. Vincent Piket, EC Ambassador and Head of Delegation in Malaysia, noted the progress at a recent appearance in Kuala Lumpur. “Thanks to the high level of commitment from the Malaysian side, we have made good progress. If we can resolve the few remaining issues, then an agreement should be ready by the end of this year,” he said. “Right now, we have a number of independent experts doing an analysis of how the Malaysian authorities and private sector assess the legality of Malaysian wood. The results will be tabled for discussion in October. If there are any gaps in the assessment, we will try and remedy it.”

The EU currently expects the first VPA certified shipment from Ghana to arrive in late 2009.

The VPA is the second move in as many weeks to help combat deforestation in Ghana. On the sidelines of a recent climate change conference, officials in Ghana announced that a plan to harvest timber at the bottom of Lake Volta, an ostensible scheme to help offset terrestrial deforestation, would be going ahead (see BRIDGES Trade BioRes, 5 September 2008, http://ictsd.net/i/news/biores/28638/).

ICTSD Reporting, “Ghana, EU clinch deal to crackdown on illicit timber trade,” AFP, 4 September 2008; “EU, Ghana Agree to Protect Tropical Forest With Timber Pact,” BLOOMBERG, 3 September 2008; “EU and Ghana strike deal on illegal timber,” FORBES, 3 September 2008; “Ghana agrees with EU to tighten timber exports,” REUTERS, 3 September 2008.

One response to “EU-Ghana Trade Deal Takes Aim at Illegal Logging”

dongfack nzeko alain 21st November 2008 at 16:19
pour l’arrêt de l’exploitation illégale des forêts, seul le changement de la législation et du système de traçabilité ne suffisent pas. au Cameroun par exemple les textes de loi sont favorables à l’arrêt de l’exploitation illégal, mais le manque de mesure d’accompagnement de cette législaton rendent le secteur forestier passible de toutes sortes de fraude au niveau de l’exploitation forestière. aujourd’hui, je pense que l’arrêt de l’exploitation illégale réside d’abord au niveau des opérateurs qui devront déja être conscient du danger que coure la planete suite à la déforestation et les conséquences qu’elles produisent.