Analysis

Country of Malaysia to be Forestry Certified (Jan 2011)

Jan 2011

In March 2009, the US implemented the Initiative Against Illegal Logging  (IALL) allowing for companies to be prosecuted for trade in illegal timber products.  There are strong trends to adopt similar laws in the EU.  In the wake of these EU moves, the government and forestry industry of Malaysia is attempting to negotiate an agreement with the European Union under which it guarantees that all imports of forestry products from the country are derived from legally harvested wood.  The EU imported roughly USD 500mn of wood products from Malaysia in 2009, making it the second largest market for the country after Japan.   Fearing US-style legislation in the EU, under which importing companies would be responsible and liable for the legality of their wood supply chain, Malaysia is attempting to negotiate on behalf of its entire industry.  The EU’s legislative efforts are termed FLEGT – Forest Law Enforcement and Governance and Trade.

 

Under Malaysia’s proposed agreement with the EU, imports from the country would be given an accelerated passage for its forestry companies.  The EU has already signed similar agreements with several African nations and talks are underway with Indonesia at present.   Talks with the EU’s largest importer of timber products, China, however, remain some ways away.  Predictably, NGOs such as Greenpeace and WWF are of the view that countrywide agreements will not eliminate the import of illegal product due to poor enforcement in exporting countries like Indonesia and Malaysia. 

 

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