Illegal Logging
A Final Report to inform a Regulation Impact Statement for the proposed new policy on illegally logged timber is now publically available.
Illegal logging is a significant global issue. It degrades forest environments, contributes to greenhouse gas emissions reductions in biodiversity, results in a loss of government revenue and deprives local communities of ownership rights and opportunities to improve their quality of life.
Globally, the Organisation for Economic Co-operation and Development estimates that 5-10 per cent of global industrial round wood trade is illegally harvested. The proportion can be greater in some high risk countries where it accounts for between 20-701 per cent of timber production. This translates to a loss of assets and revenue in developing countries of up to US$23 billion every year. The World Bank estimates that illegal logging costs the global market more than US$10 billion a year and reduces government revenues by about $US5 billion a year.
It is estimated that each year around $400 million of Australia’s forest products imports (totaling around $4 billion in 2008) were derived from sources with some risk of being illegally logged - Overview of Illegal Logging 
PDF [170kb]. The products of concern include wooden furniture, paper and paper board, wood based panels, sawn wood, doors and mouldings.
It is therefore in Australia’s interests as a responsible member of the global community to protect plants and animals and the environment, promote sustainable forest management and reduce the depletion of exhaustible natural resources that are threatened by illegal logging.
Australian Government’s election commitments
The government has committed to work with regional governments and industry to:
- build capacity within regional governments to prevent illegal timber harvesting
- develop and support certification schemes for timber and timber products sold in Australia
- require disclosure at point of sale of species, country of origin and any certification
- identify illegally logged timber and restrict its import into Australia; and
- argue that market-based incentives aimed at reducing emissions from deforestation and forest degradation should be included in a future international climate change agreement.
These election commitments are being addressed by using a multi-faceted approach to combat illegal logging. This approach is directly addressing elements of the United Nations Forum on Forests’ Non-Legally Binding Instrument on All Types of Forests (NLBI).
1. Build capacity within regional governments to prevent illegal timber harvesting
Under the International Forest Carbon Initiative the government has committed up to $15.7 million towards implementing the Asia-Pacific Forestry Skills and Capacity Building Program. This program will build capacity for delivering sustainable forest management outcomes that support efforts to reduce emissions from deforestation and forest degradation (REDD) in developing countries. The range of activities supported under the program includes skills-based training in forest certification and sustainable forest management, strengthening of institutional frameworks for implementing forest policies, improving systems of forest law enforcement and governance, developing systems to verify that timber is sourced from legally logged forests and research and information exchange.
Through bilateral agreements Australia is working with regional governments to improve key areas of cooperation in forestry and forest management including combating illegal logging.
The government continues to seek increased cooperation and support for efforts to combat illegal logging through intergovernmental bodies and regional forums designed to assist countries with the globally-agreed policy framework for achieving sustainable forest management. In the Asia Pacific region, these include:
- United Nations Forum on Forests
- International Tropical Timber Organization
- Asia-Pacific Forestry Commission
- Asia-Pacific Network for Sustainable Forest Management and Rehabilitation
2. Develop and support certification schemes for timber and timber products sold in Australia
Certification of timber and timber products at country and company level is internationally recognised as an important part of the long-term solution to illegal logging. While good progress has been made in Australia with implementing forest certification schemes, uptake in the Asia-Pacific region is much slower, resulting in a significant shortfall in certified timber products from the region.
The government is encouraging a range of players to promote the adoption of third party (independently) audited certification schemes in Australia and the Asia-Pacific region. The certification schemes operating in Australia are the Australian Forestry Standard Ltd recognised by PEFC, the Program for Endorsement of Forest Certification Schemes and the Forest Stewardship Council.
3. Require disclosure at point of sale of species, country of origin and any certification; and to
4. Identify illegally logged timber and restrict its import into Australia
Four projects approved by the Minister for Agriculture, Fisheries and Forestry are being undertaken to support these two elements of the government election commitment on illegal logging:
a) a review of existing methodologies and development of an alternative methodology for estimating the volume and value of illegally logged timber and wood products imported into Australia.
Considerable uncertainty surrounds previous estimates of the volume and value of illegally logged imports entering Australia. DAFF has commissioned Poyry Forest Industry to develop a robust methodology for assessing the risks of importing illegally sourced timber products based on the existing systems of forest governance in timber exporting countries and changes within those systems as an indicator of the possible extent of illegal logging.
b) a comparative analysis of national and international legality verification and chain of custody scheme requirements for timber and wood product imports and their applicability to Australia.
There is considerable confusion amongst timber importers regarding the capacity for verifying the legal origins of traded timber products that have certified against any one of the more than 20 timber legality assurance schemes currently available in the Asia Pacific region. URS Australia Pty Ltd has been commissioned to develop a framework to guide importers with an assessment of the risks of their timber products being illegally sourced and selecting corresponding schemes to verify the legal origins of timber products.
c) development of a draft cross-sectoral code of conduct for domestic importers, suppliers and sellers of timber and wood products for verifying the legal origins of harvested timber and wood products.
The draft code of conduct will provide guidance to industry sectors on processes for supporting the procurement of legally sourced timber products. This draft code will outline a due diligence process to be used for determining the risk of products being illegally sourced and establish a framework for assessing compliance by signatories with the code requirements. The code could be adopted and modified by different industry sectors to help demonstrate the legality of their timber supplies and to comply with any future regulatory measures for restricting imports of illegally sourced timber and wood products into Australia.
d) a Regulation Impact Statement (RIS) for assessing the potential costs and benefits for domestic business, individuals and the Australian economy of regulatory options designed to restrict the importation of illegally logged timber into Australia and providing disclosure of species, country of origin and any certification.
The Centre for International Economics (The CIE) has been commissioned to prepare:
- an issues paper was released in April 2009 to facilitate discussion on the range of issues to be considered in developing policy options to combat illegal logging and associated trade
- a draft report on the range of viable regulatory and non-regulatory options and associated benefit: cost analyses for restricting imports of illegally sourced timber together with the disclosure at point of sale of species, country of harvest and any certification. The draft report, along with public submissions, is available on the CIE web site.
- a final report that includes amendments to the draft report based on stakeholder comments, describes viable options for implementing the government’s illegal logging election commitment, a cost-benefit analysis of those options and a recommended policy option. This report will be used to assist the Department of Agriculture, Fisheries and Forestry with its preparation of the final RIS for consideration by government.
Final Report to inform a Regulation Impact Statement for the proposed new policy on illegally logged timber PDF [887kb].
Media Releases
12 February 2010 - Government responds to report on illegal logging
13 October 2009 - Significant step forward in fight against illegal logging
5. Argue that market-based incentives aimed at reducing emissions from deforestation and forest degradation should be included in a future international climate change agreement
The Government has provided $200 million to implement the International Forest Carbon Initiative. The Initiative is a key part of Australia’s international leadership on REDD and is jointly administered by the Department of Climate Change and by AusAID.
At the United Nations Framework Convention on Climate Change (UNFCCC) negotiations in Bali in December 2007, countries agreed to work toward including REDD in a post-2012 global climate change agreement. The international community agreed in Bali that action must be taken now on REDD and to establish the necessary systems and financial mechanisms to ensure long term emission reductions. The International Forest Carbon Initiative is Australia’s contribution to this global effort. Reducing emissions from deforestation in developing countries: approaches to stimulate action PDF [96kb]
The Initiative aims to demonstrate that REDD can be part of an equitable and effective post-2012 global climate change agreement. A central element of the Initiative is taking practical action on REDD through collaborative Forest Carbon Partnerships with Indonesia and Papua New Guinea. These partnerships demonstrate how the technical and policy hurdles to REDD might be addressed and provide lessons learned for input to REDD negotiations under the UNFCCC.
1 World Bank, 2002, Forest Concession Policies and Revenue Systems, World Bank Technical Paper No. 522 (prepared by John A Grey), Washington DC.