IUCN VN Readies the Private Sector for Timber Industry Changes

IUCN VN organized a round table meeting in October to inform members of Viet Nam’s wood-processing industry of changing international market regulations and to support them in devising ways to comply.

A Truong Thanh furniture factory tour showed a company adapting to international timber standards

International regulations like the European Union’s (EU) Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan, and the U.S. Lacey Act are changing the global timber market to one that increasingly requires certifications of legality or sustainability.

The round table meeting brought representatives of government agencies, certification bodies and non-governmental organizations to join the business community in discussing ways the national forest industry, and wood processing industry in particular, might respond.

The Government of Viet Nam through the Ministry of Agriculture and Rural Development (MARD) and the Netherlands Development Organization (SNV) co-hosted the meeting.

Round table presenters started by describing the EU FLEGT Action Plan, which encourages Voluntary Partnership Agreements (VPA) between the EU and timber-producing and exporting countries. The VPAs necessitate the establishment of a licensing scheme that would certify the legal source of all timber exported to the EU. The EU would provide development assistance to partner countries to enable the formation of a licensing system and forest governance reform.

Speakers then discussed Viet Nam’s specific context. As the fourth-largest exporter of wood products globally, Viet Nam is home to a furniture industry whose exports topped US$2.4 billion in 2007 and are expected to grow by another US$1 billion by 2010. Due to limited domestic supply and increased demand, Viet Nam relies on imports for the vast majority of its roundwood stocks – meaning it would have to account for harvesting practices in the countries from which it imports raw materials in any licensing scheme.  

Finding a way to source timber is important for Viet Nam, said Vincent van den Berk, a European Commission FLEGT expert, because markets in Europe, North America and parts of East Asia are becoming more restrictive. Consumer concern about forest loss, pressure on governments, adoption of public and private procurement policies, and calls for bans on illegal forest products are driving that change, he said.

Representatives of the private sector, international organizations and the government divided into separate groups to discuss the challenges facing Viet Nam and its forest industry. In presentations, all three sectors agreed that future steps toward a sustainable wood-products industry should include the Government of Viet Nam developing a definition of “legal” timber, formalizing it in legislation and ensuring independent monitoring and enforcement. They recommended increasing the domestic timber supply through sustainable use of plantations and increasing private sector capacity through technical support and corporate information sharing. 

Industry commitment to combating unsustainable timber trade could be strengthened through cross-border information exchange and possibly an informal business network, said Tran Kim Long of MARD.

Participants also visited a furniture factory of the Truong Thanh Group to see an example of a company that has already begun to certify its products.

Its owner, Vo Truong Thanh, said he supports transparency and sharing of best practices among Vietnamese furniture companies as they strive to meet international requirements for sustainability.

“I regard other national furniture companies not as competitors, but as partners,” he said.

IUCN VN will produce a report of the round table and distribute it to all participants.

For more information, please contact Mr. Tran Manh Hung at hung@iucn.org.vn

Viet Nam
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