How timber markets can help save tropical forests

Gerhard Dieterle on the legality, sustainability and profitability of green tropical supply chains
Gerhard Dieterle

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Gerhard Dieterle is Executive Director of The International Tropical Timber Organization (ITTO), an intergovernmental organization that promotes conservation of tropical forest resources and their sustainable management, use and trade.

Some of the world’s biggest companies and markets are demanding proof that any imports of wood or wood products from their suppliers, are from legal and sustainable sources. Retail giants such as IKEA, Kingfisher and Carrefour have promised to only use certified and legally compliant timber. While The Lacey Act in the United States of America, the European Union Timber Regulation, Australia’s Illegal Logging Prohibition Act and the Japan Clean Wood Act all require evidence of legality.

Such laws and purchasing policies, however, can be confusing for producers, importers and traders, who may be unclear on the documentation they need and the standards to which they must comply. This confusion can diminish market opportunities for tropical timber producers—especially those operating at a small scale and with minimal business capacity or support.

What is needed is a systems-based approach to legality and sustainability in integrated “green” supply chains—one that works for small, medium-sized and large operators.

The ultimate aim of green timber supply chains is to ensure stable, reliable supplies of timber from legal and sustainable sources. It is also important for advancing towards a bio-based circular economy in which timber can be used as a substitute for non-renewable, unsustainably produced materials and energy.

From the point of view of private operators, green timber supply chains are not just about maintaining or increasing market share, although that is an important outcome. They also help businesses ensure efficiency, best practices and transparency at every link in the chain—in the forest, on the log truck, in the mill, on the ship and in the showroom.

Companies that put in place sustainable supply chains will know exactly where their products are from, where they are at any given time, and how they have been produced. Ultimately, the efficiencies this information will bring will help ensure profitability and improve businesses in other ways too.

But this is about more than forest certification. Certification is playing a valuable role in harnessing the power of the market to improve forest outcomes. Nevertheless, it has had relatively little impact in most tropical forests because of structural barriers that need to be tackled systematically.

Building green timber supply chains involves various levels of actions and commitments across a wide spectrum of stakeholders, who need to interact in a coordinated manner. But most tropical timber-producing countries lack sufficient infrastructure and technology to establish them. Public–private partnerships—both domestically and with consumer countries—are vital, so costs are shared and the supply chain, viable.

To achieve true sustainability, you need facilitators. This is where the organisation which I lead, The International Tropical Timber Organization, comes in. For example, in a recent project we funded in Panama, implemented by WWF and the Panama Ministry of Environment, a blueprint timber traceability system in the country’s Darien Province was tested. In it we attached electronic chips to growing trees, and tracked the journey of timber from the moment it was cut down, all the way through the supply chain, until it reached the end consumer. In its pilot phase, the system is collecting information on around 700 crop trees per day. And how has it performed? Even better than we imagined: it has already reduced illegal practices such as illegal logging and over-harvesting- proving beneficial for forests, those working in forest management and businesses too. Perhaps the additional tax income for the government has helped the Ministry of Environment in its plans to expand the use of the system to other regions of the country.

This kind of traceability system, on its own, does not constitute a green supply chain. It is one of the building blocks, however, and demonstrating its feasibility will help companies, governments and other forest stakeholders throughout the tropics put in place robust systems for sustainable chains. But, we need to scale up our efforts. This will require stronger partnerships among governments, the private sector, civil society and the international development community. Imagine this: a consumer buys wood flooring in Johannesburg. The shopper can find out not only what wood its made from, but how it has been sourced. Perhaps from a family farmer in Indonesia, or a sawmill with 20 employees in Japan. The consumer can find out how the forest was managed that grew the wood, what happened to the wood as it moved along the chain, and even the social and environmental benefits and costs of buying the wood.

A dream? No! We can do this—and we must, if we want to harness the tremendous power of the market. We need to put green tropical timber supply chains in place at a global scale because the changes they bring will benefit forests, forest communities and, the multiple crises the world faces.

All views are the authors own, and not those of the Center for International Forestry Research.
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