Select Committee on Environmental Audit Sixth Report


BUYING TIME FOR FORESTS: TIMBER TRADE AND PUBLIC PROCUREMENT

"Illegal logging damages both the environment and society. It reduces Government revenues, destroys the basis of poor people's livelihoods and in some cases even fuels armed conflict. It is counterproductive to help enforce laws abroad without striving to ensure that illegally produced timber is not consumed at home ... the Government are major purchasers of both timber and timber products, and have a responsibility to ensure their own house is in order".

Rt Hon. Michael Meacher, Minister for the Environment

July 2000

  

  

INTRODUCTION

"Ancient forests are among the greatest living expressions of three billion years of evolution of life on earth".[1] They are home to some 90 per cent of all land-based species. Many of these species will not survive without protection for their habitat, the remaining ancient forests. Ten million hectares of ancient forest are destroyed or degraded each year. That equates to an area the size of a football pitch every two seconds. Already some 80 per cent of the world's large areas of ancient forest have been destroyed or degraded, much of it since 1970. Illegal logging is the single greatest threat to that which remains.

The World Bank has estimated that illegal logging results in a loss of revenue to Governments amounting to US$5 billion each year, with a further US$10 billion lost to the economies of producer countries.[2] As many as 150 million indigenous people live either in or near ancient forests. In many cases, the range of native plant and animal species found in ancient and frontier forests provide the basis of the survival of indigenous and traditional cultures. "Loss of forest resources directly affects the livelihoods of 90 per cent of the 1.2 billion people in the developing world who live in extreme poverty".[3]

The UK is a major importer of timber, dependent on imports for some 85 per cent of its consumption. Total primary wood imports in 2001 amounted to over 9.3 million cubic metres.[4] Imports of tropical hardwoods accounted for 7.9 per cent of the total, or some 0.7 million cubic metres.

Our inquiry

 Our inquiry into public timber procurement and timber import controls has taken place against a background of heightened public interest in these issues. Early in 2002, Brazilian mahogany imports caused Greenpeace to challenge the Government's interpretation of the Convention on International Trade in Endangered Species (CITES) and triggered our interest in the Government's performance in promoting the use of timber from sustainable and legal sources. Unsatisfactory or unconvincing responses to a flurry of Parliamentary Questions on public procurement in Spring 2002[5] and particularly evidence produced by Greenpeace suggesting that timber from unsustainable sources was being used in a Cabinet Office refurbishment project, served to refine the emphasis of our inquiry towards public procurement.

We took oral evidence from Greenpeace, the Forest Stewardship Council, officials from the Department for the Environment, Food and Rural Affairs (DEFRA) and Rt Hon. Michael Meacher MP, Minister for the Environment. In addition, we received 14 memoranda from a range of interested parties. We are grateful to all those who have assisted us during the inquiry.

PUBLIC PROCUREMENT

Public sector influence on the timber supply chain

 Central Government is responsible for 15 per cent of all timber procurement in the UK, making the UK Government the country's largest single consumer of timber. Including wider elements of the public sector (such as local authorities and private finance initiative (PFI) projects) takes this proportion to 40 per cent. Its position as a bulk purchaser, largely for construction and refurbishment projects and office furniture, means that the Government has a significant role in greening the supply chain. As the Government's own Advisory Committee on Consumer Products and the Environment (ACCPE) pointed out, the scale of its orders means that the Government has the potential "to specify standards and other criteria for products with a greater degree of expertise, confidence and market clout than (largely unorganised) individual consumers", to which suppliers will respond.[6] Rt Hon. Michael Meacher MP, Minister for the Environment has also acknowledged that "the Government are major purchasers of both timber and timber products, and have a responsibility to ensure their own house is in order".[7] Not only does the Government have a responsibility to lead by example in environmentally sound timber procurement practices; it also has, through its buying power, the potential to change the nature of timber markets through the procurement decisions that it makes.

DEFRA told us that "UK forests produce approximately 15 per cent of the timber consumed in the UK. There is no way at present to link production to Government use as a consumer". We were surprised that the Government is unable to identify how much of its timber demand is met from domestic sources, especially given the comparatively advanced level of certification in the UK. Unnecessary over-reliance on imported timber does not support its timber procurement policy.

In this light, the Government's often-advanced argument that there is not enough sustainable timber in the market to meet its demand looks short-termist in the extreme — little more than an excuse for inaction.[8] ACCPE highlighted some 'quick win' actions which the Government could take immediately to 'green' procurement in its First Report last year.[9] As WWF told us, "The UK Government, by communicating its policy widely and clearly, can have a critical role in creating demand and encouraging supply".[10] Public sector demand for sustainable timber would stimulate additional supply in the long term. Where requirements cannot be met from legal and sustainable sources, Government should be able to demonstrate that it has considered alternatives to virgin timber. Recycling and reuse of timber, or use of alternative species or domestic supplies, could be valuable tools in the drive to halt the wanton destruction of forests and endangered species.


Timber procurement policy 1990 - 2002

 The 1990 White Paper This Common Inheritance committed Government departments to operate procurement policies which took into account the environmental impacts of their purchasing decisions while still achieving value for money. This means looking beyond the initial price tag and taking whole life costs, quality and other benefits into account as well. In 1997, following a review of procurement activities, the Government confirmed that while procurement should be based on value for money, departments were expected where practical to purchase timber supplies from sustainable sources. In 1998 the Government's Model Policy for Greening Government Operations was launched. The model policy for timber was "to purchase sustainable timber which as far as possible comes from forests that have been independently verified as well managed to sustain bio-diversity and prevent harm to other eco-systems and to indigenous or forest dependent people".[11] That model policy was not binding and procurement officials in departments were at liberty to "adopt or adapt it as they saw appropriate".[12] In 1999 the model policy was amended to introduce a requirement for documentary evidence to demonstrate credible independent verification, following the exposure by Friends of the Earth of two instances of departments seeking to purchase Brazilian mahogany.[13]

In July 2000, the UK Government was instrumental in securing agreement at the G8 Okinawa summit to consider how public purchasing could reduce illegal logging.[14] The UK Government's own response to this commitment was swift, apparently emphatic and widely welcomed: on 28 July 2000 Mr Meacher, announced in response to a Parliamentary Question, that the previously voluntary guidance to purchasers that they should "actively seek to buy from sustainable and legal sources" would become binding on all Government departments and their agencies.[15] Heads of Procurement in each department were officially informed of the change in the status of the policy on 29 September 2000 by a letter directly from the Minister.[16] In doing so, the UK Government became the first Government in the world to attempt to put sustainable timber procurement policies in place. This worthy position was restated by the Prime Minister in March 2001 when he told a WWF conference that "We have already promised that as a Government we will only purchase timber from legal and sustainable sources".[17]

We asked the Minister why the Government had chosen the words "actively seek to" rather than requiring the procurement of timber from sustainable and legal sources in all cases. He told us that "the timber supply system as it exists... is very inchoate, fragmented and variable across the world. Therefore, you can lay down your standards, and the words "actively seek to" mean that you expect buyers to make every possible effort... in this jungle to try to achieve the required policy. Given the present state of timber supply across the world you do have to accept that the standards you would like to apply will not necessarily, automatically apply. All that you can do is actively seek to implement those higher standards".[18] In principle we accept the Minister's reasoning.

We have been unable to identify evidence to indicate that the Minister's July 2000 announcement of the policy change resulted in any change in the pattern of procurement. WWF told us that "almost two years have passed since that announcement, and the Government is still unable to confirm that all timber is purchased from legal and sustainable sources".[19] Similarly, the ACCPE, in commenting on the lack of progress on greening public procurement in general, commented that "More surprising is the apparent failure, even when a policy direction is formally decided and announced, for it to be carried through into action. The most striking example of this is the direction given... that the Government would in future by timber from sustainable sources. There is little hard evidence of this having been implemented in practice...".[20] Greenpeace told us that "on-the-ground implementation ... by departments has been wholly inadequate ... legal and sustainable procurement by departments has been half-hearted and confused in some instances, non-existent in others".[21] While the Minister emphatically rejected our suggestion that his July 2000 written answer had been more of a statement of aspiration than a step change in policy,[22] he accepted there had been "inadequacies of policy implementation".[23] While Government rhetoric has been laudable, we see no systematic or even anecdotal evidence of any significant change in the pattern of timber procurement since July 2000. The permissive wording of the policy has left those not committed to implementation free to pay it little more than lip service.

Reasons for failure

  

We have identified a number of weaknesses in the ways in which the Government sought to implement its binding policy. There are two key issues — compliance with public procurement rules and assessment of certification schemes — which, even two years on, have not been resolved satisfactorily, and a number of areas where delivery itself has been weak.

Certification and public procurement rules

Government procurement is a highly devolved function, with individual departments, agencies and business units making their own procurement decisions. There is no nationally or internationally agreed standard for certifying legally logged timber from sustainably managed forests or tracking it through the chain of supply from forest to consumer, so each procurement official has to determine for themselves whether the timber they are buying is from a "legal and sustainable source". The burden of this responsibility is increased by the fragmented and inconsistent nature of the timber supply chain, to which the Minister himself drew attention,[24] and by the competitive myriad claims of producers and suppliers that timber is 'renewable', 'sustainable', 'well-managed' or 'environmentally-friendly'. Mr Rollinson of the Forestry Commission pointed out that some of those claims are "grossly misleading, and some of them are not".[25] This is same situation which faced private sector timber retails in the early 1990s. As Dr Alan Knight, Head of Sustainability at B&Q at the time, told us "We had no clear idea about where out timber was coming from, let alone how it was produced. Our products bore more than 25 different labels in an unsuccessful attempt to reassure our customers that they came from well-managed forests".[26] The Government itself has now reached a similar conclusion. In its report on timber procurement for the Cabinet Office refurbishment project, it finds "a significant level of confusion associated with the terminology used in connection with the specification of timber".[27]

Although there is no internationally agreed certification scheme, that administered by the Forest Stewardship Council (FSC) is widely regarded as one of the best and most reliable. The WWF believes that only by "specifying FSC endorsed timber can you be sure that the timber purchased has come from an independently certified, well-managed forest and a legal source. Currently, WWF only supports the FSC scheme".[28] FSC is endorsed by a range of non-governmental organisations (NGOs) including WWF, Friends of the Earth, Greenpeace, Fauna & Flora International, and the Royal Society for the Protection of Birds. The Government itself goes as far as to give FSC as the only example of acceptable certification schemes in its guidance to procurement officials.[29] However it stops short of stipulating FSC certification for all timber purchased.

 The Minister put forward the Government's justification for not requiring FSC certification: "the procurement rules do not allow public sector buyers to demand eco-labelled products without giving suppliers an opportunity to find equivalent means of proving that their products meet the technical and quality criteria specified. But ... I entirely accept that certification may well be the most practical and cost-effective means of meeting requirements. We have to take view with regard to other standards ... there are other foreign standards, the pan-European Forest Certification, there is a Canadian Standards Association, the American Sustainable Forestry Initiative[30]... We intend to evaluate all of those against the highest standards as reflected in FSC but it is our view that at this stage we should not be restricted to FSC absolutely".[31] This interpretation of public procurement rules was also set out in a letter which Mr Meacher sent to all Green Ministers in May this year in which he drew attention to "the current legal framework for public procurement, which prevents public contracting authorities from specifying certification schemes such as FSC to the exclusion of alternative forms of evidence... to deny suppliers the opportunity to submit alternative evidence would be discriminatory within the context of EC Directives as currently interpreted".[32]

In 1999 the Department for the Environment, Transport and the Regions (DETR) and the Treasury issued a joint note on Environmental Issues in Purchasing[33] to guide officials on the integration on environmental polices with domestic and EU procurement rules and Treaty of Rome requirements.[34] It notes that drawing up contract specifications based on the model framework for greening operations can "contribute significantly to the achievement of Government targets for reducing the environmental impact of its activities".[35] However, it goes on to state that "as a matter of Community Law, purchasers can attach conditions to the award of contracts provided these conditions are compatible with the Treaty of Rome. In brief, this means that the conditions must be equally capable of being met in all Member States. However, the UK's domestic policy of not using procurement to achieve other policy ends limits the extent to which departments may have recourse to 'contract compliance'—as the imposition of contractual conditions is commonly known".[36]

 As several of our witnesses pointed out, some other EU countries have not found EU public procurement rules such a barrier.[37] Both France and Germany have recently endorsed FSC certification as part of their timber procurement policies.[38] In 2001 the European Commission published a Communication clarifying the application EU procurement directives in the context of environmental performance.[39] The Communication is more permissive than many expected and for the most part gives a green light to EU Member States to pursue environmental objectives through the requirements they set for the products they buy.[40] In publishing the Communication, the Commission noted that: "As public procurement amounts to over 1,000 billion every year across the European Union (14% of EU GDP), 'greening' these purchases could contribute substantially to sustainable development".[41] At the same time, Environment Commissioner Margot Wallström encouraged "public authorities to seize the opportunities offered by this Communication to ensure that the public... benefits from the contribution that green public procurement could make to environmental issues".[42] The greater resistance to green procurement appears to come not from the European Union and its procurement rules, but HM Treasury's traditional hard line "of not using procurement to achieve other policy ends".

The small latitude for green procurement that exists within EU and Treasury procurement rules does not provide a straightforward path for procurement officials to follow. In the absence of any direction to use FSC certification or any other certification scheme, timber procurement, like other areas of green purchasing, is partly dependent on an analysis of "whole life costs". Assessment on the basis of whole life costs means that departments take into account "all aspects of cost, including running and disposal costs, as well as the initial purchase price".[43] This has, for instance, enabled departments to purchase low-energy products but, as a procurement circular from DETR in 2000 made clear, "wider costs ... outside of those that the department directly pays for must NOT be considered at the evaluation stage as part of the financial analysis. However, these wider aspects can be considered at the specification stage" (original emphasis).[44] Nor is the assessment of whole life costs a simple task. As the Government accepts "Few organisations can afford to conduct detailed life-cycle (or whole life) assessments on all their products because of the technical expertise and resources required to produce meaningful results".[45] Yet this is the very assessment that procurement officials are expected to perform to comply with the requirements of value for money procurement and the Government's wider environmental and sustainable development goals. Blue Line Office Furniture told us that some procurement officials had indicated that they did not have tools to measure such costs and the ACCPE found that procurement officials were having to "make the best of the skills and resources that happen to be available.[46]

 DEFRA (and previously DETR) has sought to provide guidance to procurement officials across Government to enable them to purchase legally obtained and sustainable timber while remaining within the constraints of the regulatory framework. A model contract specification emphasising the need to purchase from sustainable sources has been circulated and timber is featured in the Green Buyers Guide.[47] It has also worked with the Office of Government Procurement (OGC)[48] in the provision of briefing, the development of guidance (such as the DETR/Treasury Joint Note) and joint presentations at seminars and conferences.[49] Nevertheless, integrating sustainable development and procurement remains a challenging and complex area. DEFRA has accepted that officials "are presented with a complex and bewildering situation when sourcing timber that they are not yet fully equipped to resolve".[50] The Government has failed to provide officials with adequate guidance on legal and sustainable timber procurement or the regulatory framework.

Even if the Government's hard line against the specification of FSC or any other certification being compatible with an EU-imposed regulatory framework were to be accepted, it would have been possible for the Government to establish a set of criteria against which certification schemes could have been assessed and which would have provided procurement officials with the right tools to test the various claims made by suppliers. Dr Alan Knight told us procurement specifications can be "drawn up in a way which requires good standards to be met and which allows companies which have certification to use that as a simple proof that they have met the specification".[51] It took DEFRA over a year[52] from Mr Meacher's July 2000 statement merely to commission a study to make "initial suggestions for guidance on... means of assessing suppliers claims",[53] despite the Department for International Development's prior work in the area.[54] Another year on, that work is still incomplete.[55] Lethargy in the provision of guidance on certification demonstrates a lack of commitment on the part of the Government.

Weaknesses in policy implementation

In addition to the failures to resolve issues surrounding certification and the integration of sustainable timber procurement and the regulatory framework, we have identified a number of other weaknesses in the implementation of the July 2000 policy change across Government.

Commitment and communication

Mr Meacher's personal commitment to the binding nature of the policy is obvious, both in the evidence he gave to us and in his public statement. He told us that the Government gave "absolute priority" to its timber policy.[56] At some stage in the process of dissemination across Government that sense of commitment, or immediacy, was lost. While some departments dawdled over implementation others appear to have been ignorant of the binding policy's existence. For example, the Head of Procurement at the Cabinet Office has stated that he did not receive Mr Meacher's letter of September 2000.[57] Mr Meacher told us that he would be "the first to recognise that we could and should have done more to engage other departments and to communicate the policy. I did send out a very clear statement of that policy in July 2000 but it did not communicate as efficiently as we would have expected... we could have, should have done more to train buyers, to raise awareness...".[58] This means, as DEFRA accept, that there are "still officials working on operational activities who are not fully conversant with the practicalities of implementing the policy and maybe not promoting the policy hard enough to suppliers".[59]

Leadership

As the central Government department with lead responsibility for sustainable development, much of the onus of communication on timber procurement rests on DEFRA (although as noted earlier, there has been close co-operation with OGC and the Treasury in particular) and, prior to May 2001, on DETR. In our First Report of this Parliament we noted the changes in the machinery of Government which have occurred over the last year and the impact they have had on departments' ability to deliver.[60] One of the adverse consequences of the merger between MAFF and the former DETR's Environmental Protection Group has been a 3 per cent cut in the staff budget in real terms. The Environmental Protection Group is still recovering from the loss of key officials which left it with 17 per cent of posts vacant earlier this year. Nor can there be any doubt that DEFRA's work, in its first year, has been dominated by combatting foot and mouth disease.[61] That the department lacks the capacity to deliver in any policy area other than the most immediately essential[62] must have undermined its ability to commit fully to providing the required leadership and guidance on timber procurement just as much as its lack of authority has prevented it enforcing the policy across Government.

Guidance

Mr Andrews, from DEFRA's Procurement and Contracts Directorate, told us that in the wake of Greenpeace's exposure of the use of inappropriate timber in the Cabinet Office refurbishment project, DEFRA had reviewed its own construction projects. During that process, it came to light that "wording in the Building Research Establishment Environment Assessment Method" which is mandatory for all Government departments engaged in construction projects, "did not tie up with government policy" on timber procurement.[63] That existing guidance to officials from other sources does not 'tie-up' with the Government's policy on timber procurement is only now becoming apparent, two years after the policy became binding and four years after the introduction of the model contract, is indicative of the malaise that has permeated implementation.

Reporting and targets

As part of his announcement in July 2000, Mr Meacher stated that each department was to report annually on its timber purchases, setting out how they had actively sought to purchase from sustainable and legal sources; the quantity and types of purchases made; and the assurances they had received that the source of the timber sustainable and legal. The first round of departmental reporting was due with the 2001 Greening Government Report. The 2000 Greening Government Report stated that this would "allow departments time to establish the necessary systems". Those systems were not established over the course of the year in the majority of departments. Only seven departments, not including DETR, reported any figures in 2001. Instead, last year's Greening Government Report argued that "much of departments' activity up to March 2001 was focussed on raising awareness of the commitment among buyers and their suppliers".[64] The Minister added that the disparate nature of data collection systems in departments and the limited resources available for "a new thrust of policy", may also have been factors in the failure to produce a complete set of figures. The department responsible for promoting the policy at the time, DETR, was one of those that failed to provide data in 2001. No action was taken to cajole departments to establish the required data capturing systems on time, leaving DETR's position open to the interpretation by other departments that little importance or priority was attached to reporting by DETR and its Ministers. As Mr Meacher has acknowledged, "the lack of available data makes it impossible to monitor performance".[65] Had reporting occurred as originally envisaged, DEFRA may have been alerted to failures to implement the policy earlier. As it was, the department was denied the opportunity to take timely remedial action.

Targets

 A third commitment made by the Government in July 2000 was that targets would be set for Government timber procurement from assured, sustainable and legal sources. Targets can serve to concentrate efforts. We believe they form an essential element of success in the implementation of the Government's timber procurement policy. Major private sector retailers, like IKEA, B&Q and Sainsbury's have used step-by-step, progressive targets to help them procure increasing proportions of sustainable timber.[66] Yet, despite the commitment to targets, and the example and experience of the private sector to draw on, two years later there are still no targets in place. However the absence of baseline data on current performance means that even if targets had been set post July 2000, it is unlikely that they would have reached the necessary balance between being challenging and achievable.

Engagement with the supply chain

Dr Alan Knight emphasised the need to adopt a hands-on approach to implementation. His experience at B&Q demonstrated the importance of a detailed understanding of the whole timber supply chain before negotiating with suppliers. He told us "Specifically we had to be able to track timber right back to the forest, and not allow the activities of middle men to be used as a smokescreen. Second we had to talk to all the people who mattered, in person. Writing letters and sending them specifications was not enough. They had to know we were serious and we had to get them engaged as individuals".[67] The picture he paints presents a stark contrast to the experience of Blue Line Office Furniture. Blue Line, the only UK company to deal in furniture which carries FSC certification, claims its products are "comparable in cost, and in many cases lower, than the current suppliers on the OGC list" of approved suppliers.[68] Its FSC certified office furniture products are also endorsed by WWF.[69] It told us that its experience in trying to market products to Government has been one of "total frustration, and increasing annoyance at the lip service being paid to Government policy ... to date not a single organisation has even taken the step of bench marking Blue Line products and services against their existing suppliers (OGC or otherwise)".[70] Their attempts to explore this reluctance with procurement officials produced shocking responses. They range from "Life cost is all very well but I have no tools to measure it" to "I don't care about sustainability I buy purely on price" and "I don't care what Michael Meacher says, I buy the furniture around here!".[71] It is disappointing that Government has not taken greater advantage of the experience that exists in the private sector in initiating the required culture change in procurement operations. It should do so in the future.

Other Barriers to Green Procurement

Our analysis of the Government's implementation of its timber procurement has also revealed a number of barriers which represent considerable hurdles that will have to be overcome if the Government is to make progress in any area of green procurement.

  • The second is the devolved nature of procurement across Government. As the ACCPE pointed out "individual Government departments and agencies run their procurement activities with little co-ordinated political direction from above, following locally determined priorities".[73] The Minister also drew attention to the "very devolved and fragmented structure in procurement" and accepted that the Government had underestimated the impact this would have on implementing procurement policy changes.

  • The third is the failure to exploit fully the OGC's potential. OGC could exert a strong influence on procurement policies across Government, yet it has not been given an explicit instruction to pursue the Government's sustainable development objectives through its operations.[74]

Overall assessment

The Government failed to undertake adequate research or preparatory work prior to or immediately after its July 2000 commitments on timber procurement. As a result it hugely underestimated the scale and complexity of the challenge it was facing and failed to commit adequate priority or resources to implementation. This in turn led to an abject failure to deliver on the promises made.

Recent changes

The Government's progress towards its goals on timber procurement has come under increasingly close scrutiny in recent months, from Members of Parliament through parliamentary questions,[75] from the media and from NGOs,[76] culminating in Greenpeace's occupation of the Cabinet Office in April 2002 when it suspected, rightly, that some of the timber being used in a refurbishment project did not meet the specifications in the model contract.[77]

On 13 May 2002 Mr Meacher wrote to the Green Ministers in each Government department, urging greater emphasis on delivery. Specifically he requested that each Department review all its current projects that may include timber or timber products, that those responsible for each project be reminded of the Government's policy on timber procurement and asked to report on how that policy was being implemented, and that DEFRA be provided with details of all the projects concerned. Departments had already been asked to review their data collection systems to ensure that they are able to report in timber purchases for the next Greening Government Report (due in November 2002). Mr Meacher's letter reminded them of this.

Earlier, in October 2001, DEFRA commissioned a three-phase scoping study from the environmental consultants, ERM. Phase one of the study includes research on procurement activities, sustainable forestry standards and certification schemes and the production of initial suggestions for guidance on monitoring systems and means of assessing suppliers' claims. Phase two includes a review of options and creation of an implementation plan, recommendations for maintaining guidance and for monitoring and reporting systems. Phase one is nearly complete. Phase two, originally intended to be completed in June 2002, will report in September 2002, the delay being the result of a decision to include a consultation process.[78] Phase three, which will cover facilitation and management of implementation, has yet to be commissioned.

It is likely that the ERM study will conclude:

    that the only credible form of evidence is independent verification

    that Government contracts should specify requirements for sustainable forestry and chain of custody management in terms of agreed international principles

    that to expect the Government fully to implement its policy over a short timescale is unreasonable

    that progressive targets should be established

    that concentration on a few key suppliers would be more likely to produce benefits in the short term, and

    that some form of guidance resource centre is required for Government buyers, who will never possess the expertise needed to understand all the issues.[79]

We warmly welcome the Government's recent efforts to reinvigorate implementation of the timber procurement policy and in particular the work now being undertaken by consultants. We acknowledge the valuable role that Greenpeace have played in stimulating recent Government activity.

Towards legal and sustainable timber procurement

It is vital, as the Minister acknowledged, that lessons are learnt from the experience of the last two years. The ERM study, if it reports as expected, will go some way towards that.[80] We would endorse each of the expected ERM conclusions outlined above. However, we do not believe that they are broad enough in scope to foster the cultural change that will be required for the policy to be fully and successfully implemented across Government. Concerted action needs to taken not only right the way through the supply chain but also through the layers of civil service decision-making and operations. In order to produce a real step change towards sustainable and legal timber procurement we recommend that Government, by the end of the year:

Establish permanent and demonstrable commitment to the policy from Ministers across Government;

Set timber procurement policy as a priority for implementation which is not to be put aside as other priorities emerge;

Ensure that every department has effective data capture and reporting mechanisms in place and a means by which inadequate reporting can be dealt with swiftly and efficiently. It is totally unsatisfactory for departments to be let off the hook for failing to report adequately and in a timely manner;

Establish clear criteria for the assessment of certification schemes, drawing on the expertise of NGOs where appropriate;

Establish clear and progressive targets, in line with the expected ERM report, on the basis of the data provided this year, which reflect the potential to make significant progress immediately but also the incremental improvements which can only be made in the longer term; and

Provide definitive guidance to procurement officials on the application of public procurement rules in the light of the Commission's interpretative communication and on terminology.

 Medium term objectives should include:

Constant and multi-level engagement between DEFRA, OGC and procurement officials in departments and agencies;

Greater involvement on the part of OGC (on the behalf of departments) with the supply chain at every level. This will necessitate the commitment of significant resources;

When the required infrastructure is in place, a change in the onus of proof so that procurement officials are prepared to defend their decisions to purchase from non-certified sources rather than having to demonstrate that they sought to do so; and

Encourage further development of public procurement policy in a direction which facilitates rather than hampers green procurement.

Green procurement

Timber should have been one of the easiest areas of procurement to 'green'. The issues are clear, there is strong public awareness as well as a wealth of experience and expertise in the private sector and in NGOs to draw on, and a widely accepted certification scheme. Lessons learnt from experiences in the last two years should be applied in other areas of greening procurement. Most important, adequate and thorough research should be undertaken prior to the announcement of policy changes and a clear indication of timescales implementation given or the Government risks eroding support and fostering cynicism over its commitment to green procurement. We intend to return to the issue of integrating sustainable development into public procurement in 2003.

ILLEGAL LOGGING AND INTERNATIONAL TRADE IN TIMBER

 Illegal logging occurs when timber is felled, processed or traded in violation of national laws. It is known to occur in as many as 70 countries. The World Bank has estimated that illegal logging results in an annual loss of revenue to governments of around US$5 billion with an additional US$10 billion lost to the economies of producer countries.[81] In 1998 the G8 countries formally recognised that "illegal logging robs national and sub-national governments, forest owners and local communities of significant revenues and benefits, damages forest eco-systems, distorts timber markets and forest resource assessments, an acts as a disincentive to sustainable forest management" and agreed a set of actions designed to deter illegal logging and trade in illegal timber. One important aspect of the agreement was to review internal procurement practices. Regulating the flow of trade in timber is an equally important tool in combatting illegal logging.

It is estimated that in 1999, the latest year for which figures are available, the UK consumed some 46.7 million cubic metres of timber.[82] Of this around 15 per cent comes from domestic sources while the remaining 85 per cent is imported.[83] More than 90 per cent of the UK's imports are from temperate regions, such as Scandinavia and the Baltic States, where good progress has been made in achieving independent certification of forests.

It is the UK's imports of tropical hardwoods, which account for around 7 to 8 per cent of imports by volume, which give greater cause for concern. For the most part, they come from countries where there are no robust certification schemes. Many of the species concerned, such as Brazilian mahogany, are endangered. The timber concerned is frequently felled in ancient forests, causing the maximum damage to biodiversity and to vulnerable eco-systems. A significant proportion is logged illegally. The WWF estimates that 80 per cent of logging in the Brazilian Amazon is unlawful and that 70 per cent of Indonesia's timber exports are illegal.[84] These two countries alone account for around a third of the UK's tropical timber supply.

A recent WWF report states that "an area of forest nearly three times the size of the Isle of Wight is illegally destroyed every year to provide timber and paper for Government projects".[85] Friends of the Earth found that 60 per cent of all tropical imports into the UK were illegally logged and that 20 per of all illegally logged tropical timber entering the EU came through UK ports — a higher proportion than in any other EU Member State (based on 1999 trade flows).[86]

CountryIllegally logged tropical timber as a percentage of all tropical timber imported Illegally logged tropical timber imports as a percentage of all such imports into the EU
UK
60%
20%
France
50%
15%
Belgium
60%
15%
Germany
50%
10%
Netherlands
50%
10%
Italy
40%
10%
Spain
30%
5%
Portugal
50%
5%
EU
50%
-


Source: Friends of the Earth, European League Table of Imports of Illegal Tropical Timber, 2000

International Convention on Trade in Endangered Species

The primary international tool for regulating trade in timber is the International Convention on Trade in Endangered Species (CITES). It aims to protect certain plants and animals by regulating and monitoring international trade to prevent it reaching unsustainable levels. The Convention was established in 1975. The UK became a party to the Convention in 1976. There are now more than 150 parties to the Convention. The CITES secretariat is administered by the UN Environment Programme.

CITES regulates international trade in over 25,000 species of plants, of which 26 are timber species. These species are listed in three Appendices to the Convention. Trade in species listed in Appendices I and II is strictly controlled while Appendix III species are listed primarily for monitoring purposes.[87] The UK Government "strongly supports CITES as an essential instrument for helping to safeguard species which are threatened by international trade".[88]

DEFRA's Global Wildlife Division is the UK CITES Management Authority. It is responsible for ensuring that the Convention is properly implemented in the UK. This responsibility includes enforcement and issuing permits and certificates for the import, export or commercial use of CITES specimens. Enforcement of the Convention at borders is primarily carried out by HM Customs and Excise and inland by the police.

Customs and Excise have powers under section 39 of the Customs and Excise Management Act 1979 to seize any shipment presented for clearance that has been imported contrary to a prohibition or restriction. There are restrictions in relation to some species of timber under CITES. Those species listed in Appendices I and II require an import permit from the UK before they can be brought in. DEFRA's memorandum states that "checks are made to ensure that the specimens were lawfully acquired" before a permit is issued.[89]

Within the EU, CITES is implemented by means of Council Regulation and a Commission Regulation.[90] CITES species may be traded freely within the EU although suppliers can be required to provide evidence confirming lawful importation or acquisition.

Mr Meacher has stated that the UK has "a good record of CITES enforcement".[91] The robustness of arrangements has however been questioned by NGOs — most recently by Greenpeace earlier this year when the Government refused to halt the importation of two shipments of Brazilian mahogany (listed under Appendix III) despite the Brazilian CITES management authority imposing a complete ban on trade in Brazilian mahogany in October 2001.[92] Germany and Belgium have seized similar shipments from Brazil under CITES rules.[93] Greenpeace sought and were granted a judicial review of the Government's decision. We look forward to the outcome of that review clarifying the powers of the UK Government to halt such shipments. Inconsistent interpretation of CITES undermines the Convention's credibility, as well as the UK's profile as a leading force against illegal logging. If the UK were to come to be seen as the weak link in the EU chain of CITES controls, there is a risk of an even higher proportion of illegally logged timber entering the EU through UK ports.

Brazilian mahogany is listed in Appendix III of CITES. DEFRA told us that "the Government is broadly satisfied that effective controls are in place to regulate the trade in endangered or vulnerable timber species presently listed in Appendix I and II of CITES".[94] We have seen no evidence to challenge that position. The controls on Appendix III listed species are less rigorous. The Government believes that "tighter controls are needed on those species that are listed for monitoring purposes", that is under Appendix III.[95] We agree. We welcome the Government's proposal to consider with other EU Member States whether the CITES Regulations should be amended to impose a requirement of prior presentation of export documentation for certain Appendix III species.[96]

Requiring prior presentation of export documents for Appendix III species would involve an amendment to primary EU legislation which can be a lengthy process. Transference of some species from Appendix III to Appendix II would provide greater controls and could probably be achieved more quickly. In the case of Brazilian mahogany, this action would reinforce the ban on exports imposed by the Brazilian Government. We welcome the Government's proposal to pursue greater protection for big leaf mahogany through its transference from Appendix III to Appendix II.[97]

Non-CITES species

 As CITES exists primarily to protect endangered species, not all species of timber fall within its remit. There are no regulations that enable Customs and Excise to control the entry of illegally logged timber unless it contravenes CITES arrangements.[98] Legislation to create such a control would be a European Commission competency. We welcome the preliminary work that is being undertaken through the Commission to consider the possibility of a new EU framework to enable controls on the importation of non-CITES timber species to be put in place and the Minister's support for this development.[99]

The success of any EU legislation enabling controls to be imposed on imports of non-CITES species will in part be dependent on the capacity of producer countries ensure that they are able to put in place their own governance procedures. The UK Government recently reached a groundbreaking bilateral agreement with the Indonesian Government designed to tackle illegal timber felling and trade in Indonesia. The agreement commits the UK Government to provide technical and financial support to Indonesia for legislative reform and the development of systems to prevent the harvesting, export and trade in illegal timber. Both Governments are also committed to encourage the forestry industry to take action to reduce the amount of illegally logged timber.[100] In reaching this agreement, the UK Government became party to the world's first bilateral forestry agreement. Similar negotiations have been opened between the UK and half a dozen other producer countries.[101] We congratulate the Government for its groundbreaking agreement on timber with Indonesia and for pursuing similar agreements with other timber producing countries. We encourage it to promote the use of such agreements among other EU Member States.



1   Greenpeace, The protection of ancient forests, May 2000, para 1. Back

2   WWF, The timber footprint of the G8 and China, June 2002, p. 10. Back

3   WWF, The timber footprint of the G8 and China, June 2002, p. 10. Back

4   Ev 87. Back

5   See 22 Whitehall Timber Procurement: Findings of the Cabinet Office investigation, July 2002, para 1.3. Back

6   First Report of the Advisory Committee on Consumer Products and the Environment, Choosing Green - Towards More Sustainable Goods and Services, para 112, 2001. Back

7   Official Report, 28 July 2000 col. 947W. Back

8   Department for Environment, Food and Rural Affairs, Ev 96. Back

9   First Report of the Advisory Committee on Consumer Products and the Environment, Choosing Green - Towards More Sustainable Goods and Services, paras 107-110, 2001. Back

10   Ev 96. Back

11   Ev 30-31. Back

12   Ev 30-31. Back

13   Ev 30-31. Back

14   Ev 20. Official Report, 16 May 2002, col. 819W Back

15   Official Report, 28 July 2000, col. 947W Back

16   Q. 207. Back

17   Prime Minister's speech to the WWF-UK conference, Environment: The Next Steps, 6 March 2001.  Back

18   Q 203. Back

19   Ev 94. Back

20   Second Report from the Advisory Committee on Consumer Products and the Environment, Action for Greener Products: a tool box for change, para 130, April 2002. Back

21   Ev 2. Back

22   Q 206. Back

23   Q 224. Back

24   Q 203. Back

25   Q 42 Back

26   Ev 82. Back

27   22 Whitehall Timber Procurement: Findings of the Cabinet Office investigation, 12 July 2002, para 7.1. Back

28   Ev 94. Back

29   Second Annual Report of the Green Ministers Committee, Greening Government, November 2000, para 6.31. Back

30   Not all certification schemes have the same level of robustness as that administered by the FSC. Back

31   Q. 221. Back

32   Ev 72. Back

33   Note by HM Treasury and DETR, Environmental Issues in Purchasing, 1999. Available at http://www.hm­treasury.gov.uk/about/about_envpurchase.cfm. Back

34   The Treaty of Rome guarantees the free movement of goods and services and non-discrimination of the grounds of nationality for example. Back

35   Note by HM Treasury and DETR, Environmental Issues in Purchasing, 1999, para 5. Available at http://www.hm­treasury.gov.uk/about/about_envpurchase.cfm. Back

36   Note by HM Treasury and DETR, Environmental Issues in Purchasing, 1999, para 6d. Available at http://www.hm­treasury.gov.uk/about/about_envpurchase.cfm. Back

37   Q. 6. Back

38   QQ. 221-3. Back

39   Commission Interpretative Communication on the Community Law Applicable to Public Procurement and the Possibilities for Integrating Environmental Considerations into Public Procurement, Com (2001), 274 Final. Available at http://europa.eu.int/comm/environment/gpp/. Back

40   See Second Report from the Advisory Committee on Consumer Products and the Environment, Action for Greener Products: a tool box for change, April 2002, para 129. Back

41   European Commission Press Notice of 5 July 2001, IP/01/959. Available at http://europa.eu.int/comm/environment/gpp/. Back

42   European Commission Press Notice of 5 July 2001, IP/01/959. Available at http://europa.eu.int/comm/environment/gpp/. Back

43   Note by HM Treasury and DETR, Environmental Issues in Purchasing, 1999, para 3. Available at http://www.hm­treasury.gov.uk/about/about_envpurchase.cfm. Back

44   DETR, Greening Government Operations: Departmental Procurement and the Environmental Agenda, Procurement Circular 02/2000 Back

45   Note by HM Treasury and DETR, Environmental Issues in Purchasing, 1999, para 19. Available at http://www.hm­treasury.gov.uk/about/about_envpurchase.cfm. Back

46   Ev 75; Second Report from the Advisory Committee on Consumer Products and the Environment, Action for Greener Procurement: a tool box for change, para 132. Back

47   Ev 20. Back

48   The OGC has a primary role in providing professional advice to central government departments about procurement generally and contracts relating to construction projects in particular. Back

49   Ev 21. Back

50   Ev 20. Back

51   Ev 83. Back

52   Q. 107. Back

53   Ev 21. Back

54   Greening Government, Timber procurement: progress or preclusion, May 2002, p. 19. Back

55   Ev 21. Back

56   Q. 193. Back

57   Q. 207. Back

58   Q. 191. Back

59   Ev 21. Back

60   First Report from the Environmental Audit Committee, Session 2001-02, Departmental Responsibilities for Sustainable Development, HC 326. Back

61   DEFRA, Annual Report 2002, Cm 5422, pp. 22-23. Back

62   ENDS, June 2002, p. 4. Back

63   Q. 95. Back

64   Third Annual Report of the Green Ministers Committee, Greening Government, November 2001, para 5.59. Back

65   Ev 72. Back

66   Q. 16. Back

67   Ev 82. Back

68   Ev 74. Back

69   Ev 77; 94. Back

70   Ev 74. Back

71   Ev 74-5. Back

72   Q. 236. Back

73   Second Report from the Advisory Committee on Consumer Products and the Environment, Action for Greener Products: a tool box for change, April 2002, para 132. Back

74   Second Report from the Advisory Committee on Consumer Products and the Environment, Action for Greener Products: a tool box for change, April 2002, para 132. See also the Second Report from the Treasury Committee, Session 2001-02, on The Office of Government Commerce, HC 851. Back

75   Eg 14 Feb 2002, PQ from Joan Walley. Back

76   Eg WWF article in Greening Government magazine, Timber procurement - progress or preclusion, May 2002, pp.18-9. Back

77   Ev 2-3. See also 22 Whitehall Timber Procurement: Findings of the Cabinet Office Investigation, July 2002. Back

78   Ev 21. Back

79   Q. 219. Back

80   QQ. 193, 217. Back

81   WWF, The timber footprint of the G8 and China: making the case for green procurement by government, June 2002, p. 10. Back

82   Ev 90. Back

83   QQ. 257-261. Back

84   WWF, The timber footprint of the G8 and China: making the case for green procurement by government, June 2002, p. 6. Back

85   WWF-UK, The Timber Footprint of the G8 and China, June 2002. Back

86   Friends of the Earth, European League Table of Imports of Illegal Tropical Timber, 2001. Back

87   Ev 24. Back

88   www.ukcites.gov.uk/intro/default.htm Back

89   Ev 23. Back

90   Council Regulation (EC) No. 338/97 and Commission Regulation (EC) No. 1808/01. Back

91   Written answer 25 April 2002. Back

92   IBAMA Decree, IN17 of 19 October 2001. Back

93   Ev 4. Back

94   Ev 25. Back

95   Ev 23. Back

96   Ev 23. Back

97   Ev 25. Back

98   Q. 275. Back

99   Q. 275. Back

100   Q. 202. Back

101   Q. 201. Back


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2005
Prepared 24 July 2002