Abstract
The recent entry into force of the EU Timber Regulation (EUTR) completes the EU's policy framework designed to curb trade in illegal timber. In light of the imminent ratification of a Voluntary Partnership Agreement (VPA) between the EU and Indonesia, the Timber Regulation raises questions about the role that Indonesia's timber legality assurance system—the SVLK—will play in securing access for Indonesian timber to the European market. We performed a regulatory analysis and found that the SVLK will serve as the basis for licensing direct exports of timber to the EU under the VPA, but that it has weaknesses which the VPA may be unable to address. The Timber Regulation, which requires due diligence for timber imports, might have helped address these weaknesses, but it explicitly excludes VPA timber from these requirements. However, trade data indicates that the size of the timber trade that the VPA will govern is not large. Further, the Regulation will apply to Indonesian timber that enters the EU via third countries. Its ability to address gaps in the SVLK as regards this timber depends on two contingencies: (1) whether the SVLK meets the Timber Regulation's certification scheme reliability criteria; and (2) whether the due diligence provision can be construed as permitting regulators to demand proof of legality beyond certification. We argue that the EUTR will continue to play an important role in regulating imports of Indonesian timber even after the VPA is ratified.
Highlights
Over the past decade, the EU has become a leading supporter of timber legality verification—a technique whereby traded timber is restricted unless it complies with the relevant laws of the country in which it was harvested
This paper examines the relationship between the Sistem Verifikasi Legalitas Kayu (SVLK) and the EU Timber Regulation (EUTR)
Relationship between the SVLK and the EUTR. In light of these concerns, the question is whether there is any scope for the EU to restrict imports of SVLK-certified timber
Summary
The EU has become a leading supporter of timber legality verification—a technique whereby traded timber is restricted unless it complies with the relevant laws of the country in which it was harvested. Timber harvesters and processors are required to obtain certification, at their own expense, demonstrating that their timber operations are conducted legally To ensure that they do not place illegally harvested timer or timber products on the European market, operators must exercise “due diligence” Severe penalties combined with the possibility that operators could be found liable for mere negligent violations, or even for violations lacking any culpability (i.e., a ‘strict liability’ standard) could significantly chill imports from sources with even a hint of illegality Such penalties would strongly incentivize timber-exporting countries to negotiate VPAs, to eliminate the uncertainty that operators face in deciding whether to deal in their timber
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