Sunday, October 28, 2012

Will EU buyers still go for Vietnamese furniture makers?

In July 2011 the Environmental Investigation Agency (EIA) released a report entitled Crossroads, revealing how well-connected companies in Vietnam and the Lao PDR (Laos) were profiting from illicit timber trade between the two countries. The report found significant trade in raw logs from Laos to Vietnam, in contravention of the former country’s stated policy of banning the export of unprocessed timber.

In March 2012 the Government of Laos (GoL) stated that it would take “serious action” to reduce the export of unprocessed natural resources, including timber, in order to support domestic industries. Yet on the mountainous border with Vietnam, policy continues to diverge with reality.

Further recent investigations by EIA show that it is business as usual and that the plunder of Laos’ forests continues unchecked. A handful of powerful firms are still moving logs across the border, aided by murky exemptions from timber export controls apparently granted by the upper echelons of the GoL.

In 2012, once again, unprocessed Laos logs flooded into coastal cities in Vietnam to feed its voracious furniture industry. By July the ports of Qui Nhon, Danang, and Vinh were stacked with Lao logs to supply local factories or to be sold to international traders, while wood factories in Lao struggled to obtain raw materials.

Both Laos and Vietnam are engaged in discussions under the European Union’s Forest Law Enforcement, Governance and Trade (FLEGT) initiative. A core element of FLEGT is the signing of bilateral Voluntary Partnership Agreements (VPA) that seek to guarantee legal timber supplies from producer countries into the EU.

Vietnam’s draft Timber Legality Assurance System (TLAS) recognises the need to ensure that timber imports are legally sourced. Indeed, Vietnamese products face exclusion from European markets if their provenance cannot be proven when the EU Timber Regulation (EUTR) comes into force in March 2013. For Laos, FLEGT offers a significant opportunity to support and reform its forestry sector to help it meet its objectives of both better forest governance and a domestic processing industry.

Source EIA
Download full report here


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