IMM presentation Indonesia workshop

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FLEGT VPA Independent

Market Monitoring (IMM)

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Presentation structure

• _{IMM background, role, progress}

and outputs

• _{Draft baseline data}

–

_{Indonesia in international trade}

–

_{Indonesia in EU trade}

• _{Concluding comments}

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IMM Background

• _{IMM is a condition of some FLEGT VPAs}

(including Indonesia)

• Builds on IMM proposal by EFECA in EFI-commissioned report issued 2012

• Funded by European Commission through through DG International Cooperation and Development

• Budget: €4.4 million over 5 years (2014-2018)

• _{Hosted by International Tropical Timber}

Organisation (ITTO)

– Promotes expansion & diversification of trade in tropical timber from sustainably managed and legally harvested forests

– Membership = most producer & consumer countries.

– Record of statistical capacity building, data collection & market information

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FLEGT VPA Partners

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IMM Objectives

• _{Generate information that demonstrates changes in trade of}

legally verified timber and timber products in the EU market

• _{Improve knowledge and understanding of the impacts of}

VPAs on timber prices, trade and market trends globally

• _{Ensure VPA countries & EU provide reliable stats and info on}

FLEGT timber trade and acceptance in their reporting

• _{Inform decisions by VPA Joint Implementation Committees}

(JICs) by providing timely & accurate info on market impact

• _{Contribute to monitoring the impacts of the FLEGT Action}

Plan and to inform its implementation

• _{Develop a long-term strategy for sustaining the IMM in}

consultation with the EU and VPA partner countries

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IMM Oversight & Guidance

• Project Steering Committee (PSC)

–Monitors IMM progress, review work plan and reports –ITTO & EC representatives

–Observers e.g. EFI, Eurostat, interested government agencies

• Advisory Committee

–Advises on technical aspects, promotes coordination, facilitates participation by stakeholders and communication of IMM activities.

–ITTO, FAO, UN-ECE, Eurostat, EFI, government agencies from EU & VPA Partner countries, trade associations, other organisations interested in timber market monitoring.

• Timber Market Monitoring Committee (TMMC)

–Facilitates info exchange, avoids duplication, improves market monitoring practices & stats, common data protocols

–AC sub-group of organisations directly engaged in market monitoring –ITTO, EFI, Eurostat, Indufor, ATIBT/IFIA, STTC, FAO, UNECE, Global

Timber Forum, Chatham House, WRI, & Forest Trends.

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IMM Methodology

• _{Framework (currently in draft) of 52}

indicators for quantitative

assessment of market impacts

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33 EU-wide indicators

• _{Overall EU market for all FLEGT VPA timber}

• _Examples:

– _{market impact of EUTR implementation;}

– _{scope and content of public sector procurement policies;} – _{timber procurement requirements established by EUTR}

MOs, TTF’s & major retailers

– _{handling of VPA licenses in FSC and PEFC CoC standards} – _{perceptions of VPA licensed timber in design and}

architectural community

– _{recognition of FLEGT VPAs in guidelines for assessment}

of forest sector risk in the financial sector

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19 VPA partner-specific

indicators

• _{Changing market for each VPA partner country}

• _Examples:

–

_{monitoring of volume and value of trade flows}

between the VPA partner country, the EU and other

markets;

–

_{prices for specific indicator products from the partner}

country;

–

_{time to clear customs}

–

_{size and quality of investment in the VPA partner}

country

–

_{changing perceptions of timber from the partner}

country resulting from VPA licensing.

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Key operational issues

• _{Phased approach - progressively widen monitoring}

against indicators as more licensed timber becomes

available & with rising awareness

• _{Close working relationship with JICs in VPA countries}

• _{Network of IMM correspondents in VPA Partner}

Countries & priority EU Member States reporting

regularly

• _{Additional surveys undertaken directly by IMM or by}

other members of TMMC

• _{Linkage to trade associations in both producer and}

consumer countries to encourage input from private

sector

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IMM Progress

• _{Baseline report}

_{– 1}

st

review draft end November 2014,

final report available Jan/February 2015

– _{VPA Partner Countries in international & EU trade 2004 to}

2014

– _{Identify & preliminary review of factors driving change}

• Liaison with VPA Partners

– participation at Liberia

JIC & Ghana JMRM in May/June 2014, workshops

Indonesian Ministry of Forestry in November 2014,

Cameroon/Congo Republic 1

st

Qtr of 2015

• _{First Advisory Committee meeting}

_{planned 1}

st

Qtr

2015 (likely Brussels)

• _{Preliminary negotiations with potential members of}

_IMM

Correspondents Network

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Improved access to

statistics

• Strengthen ITTO’s existing capacity

• Responding to regular requests

from policy makers and private sector

• Supporting redevelopment of EFI Forest Products Trade Flow Database

– Based on global COMTRADE & EU COMEXT data

– HS Chapters 44 (Wood), 47 (Pulp), 48 (Paper), 49 (Printed papers), 94

(Furniture)

– Validated - comparing unit values & mirror export/import data

– Publicly available on ITTO and EFI websites

– Data visualisation

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Key IMM outputs

• _{Annual reports (First before end 2015)}

–

_{Current status of licensing in VPA Partner}

countries

–

_{Annual update of production and trade}

data

–

_{Overview major trade trends & issues}

arising

–

_{Systematic review against indicators}

• _Website

–

_{www.itto.int/imm}

–

_{Quarterly e-news}

–

_{Production and}

trade database

–

_{Data visualisation}

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Draft baseline data:

Overview of tropical

timber trade

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Draft baseline data:

Indonesia in

International trade

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Draft baseline data:

Indonesia

in EU trade

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Eurostat construction production index

2010=100

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A Perfect Storm: drivers of tropical

hardwood market decline in Europe

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EU Member State import of Indonesian wood

products

Monthly value (moving average) – March 2004 to

June 2014

€1 million (constant 2013 prices)

Red line = date of EUTR enforcement

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Concluding comments

• _{Trade data yet to reveal direct EUTR impact}

– Other commercial factors more in evidence

– Different interpretations – EUTR not yet effective? Tropical

forest regulation and/or trade due diligence already effective? Data inadequate?

• _{Significant gaps in information}

– Limited availability & poor quality of production and trade data

– Systematic assessments illegality risks for countries/regions/products

– Data on flows of certified/verified legal timber

– Regular input from private sector - role for IMM Correspondents network

• _{Decline in relative role of EU in tropical trade (short}

term?) reinforces:

– Importance of collective action on consumer side

– Need for more effective market development strategy in EU

• _{Central role for VPA process}_{- wide international}

coverage - critical mechanism for EU engagement in tropical countries – solid foundation for tropical wood market development

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