On 2 days, from October 12th to 14th, 2022, the German Society for Cooperation and Development (GIZ) in Dong Nai in cooperation with the Ministry of Forestry of Vietnam organized the “Seminar on the value chain of forest products and their implementation of the Convention on Forest Products “. VPA/FLEGT Regulation”.

At the workshop, participants provided information on the Viet Nam-European Union (EU) Voluntary Partnership Agreement on Forest Law Enforcement, Forest Policy and Trade in Forest Products (VPA/FLEGT).

TRANSFORMATION ON TIMBER IMPORT

Mr. Luu Tien Dat, General Department of Forestry, said that the Voluntary Partnership Agreement between Vietnam and the European Union (EU) on Forest Law Enforcement, Forest Policy and Trade in Forest Products (VPA/FLEGT) was signed in 2018 became , valid from 2019.

The agreement aims to ensure that Vietnam’s timber products and timber products are legally produced, which will help improve forest management, expand markets and promote trade in sustainable timber and timber products.

The VPA/FLEGT Agreement became one of the commitments in Chapter 13: Trade and Sustainable Development of the EU-Vietnam Free Trade Agreement (EVFTA).

According to Mr Dat, Decree 102 (issued by the government on September 1, 2020) “internalised” Vietnam’s process to implement the obligations under the VPA/FLEGT Agreement.

The General Department of Forestry has made a detailed assessment of the impact of the VPA/FLEGT Agreement and Decree 102 on the production and export chain of timber and timber products in Vietnam. Accordingly, the export turnover with wood and wood products has increased very strongly in the last 10 years with an annual growth rate of 30-40%.

In 2021, the total export turnover of wood and wood products will reach US$14.72 billion, placing Vietnam in the top 5 in the world after China, Poland, Germany and Italy. The timber industry aims to reach $20 billion by 2025.

Mr. Nguyen Tuong Van, vice president of the Vietnam Forestry Science and Technology Association, said that the VPA/FLEGT agreement did not have a big impact on timber exports to the EU, but had a strong impact on wooden furniture exports to the market. US school.

The US also has its own timber trade law, but as Vietnam negotiates and implements the VPA agreement with the EU, Vietnam has heavily implemented timber control and prevented legal timber, so the US also considers this a “passport” for Vietnamese timber products, that are exported to the United States. Up to now, Vietnam’s timber export turnover to the US accounts for 58% of Vietnam’s total timber products exports.

“The most obvious impact of Decree 102 on the management of imported timber is the transformation of the import market: from a negative (high-risk) geographic area to a positive (US, EU, Australia) geographic area (US, EU, Australia). The number of imported wood materials from positive geographic areas has increased greatly,” stressed Ms. Van.

FLEGT LICENSE SHOW, WHY?

However, until now it has not been possible to issue a FLEGT license for deliveries of wooden furniture to the EU. Explaining the delay, Mr Dat said that while Vietnam exports timber products to more than 100 countries, it also imports raw timber from nearly 80 countries, so it is easily affected if any of them are affected by legislation and policies on forest management and timber trade change.

Mr. Luu Tien Dat reiterated that by this date, Vietnam’s legal system is packed with regulations to ensure timber production and timber trade are legal and compatible with the EU and that Vietnam has put in place surveillance.

Therefore, the EU and Vietnam have agreed to set up a classification system for wood processing and exporting companies in order to reduce the administrative burden on state administration authorities and companies. Simultaneously facilitate manufacturing and business activities and encourage companies to comply with the law.

Accordingly, wood processing and exporting companies are divided into 2 groups. Group 1 is the group that fully complies with the laws of Vietnam. Group 2 are the companies that have not yet complied with the provisions of Vietnamese law.

Companies named in Group 1 do not need to be verified, but companies are self-certified when preparing export documents in the Forest Products List.

Group 2 companies are required to verify the following prior to export: The local Forest Protection Agency will review records and inspect at least 20% of the volume of each export shipment.

The assessment and classification of wood processing and exporting companies has been implemented since May 2022. As of October 10, 2022, there are 141 wood processing and exporting companies classified as Group I, which represents a limited proportion of the total number of companies subject to classification (1,200 -1,300 companies).

Ms Van stressed that in order for the VNTLAS system to work, the FLEGT licensing scheme needs to undergo an independent assessment involving an EU-Vietnam agreed agency. However, an independent assessment of the VNTLAS system is currently not possible because the EU considers the number of 141 companies classified as Group I to be too small.

“Currently, most of the small and medium-sized enterprises have not submitted any documents to the authorities for classification, because the assessment and classification is not just about legal timber, but companies are required to comply with all Vietnamese laws and regulations according to the country, tax, environment, labor , fire safety, many companies have not yet received records on these issues,” said Ms. Van.

Speaking on behalf of timber industry companies, Mr. Ngo Sy Hoai, vice president and general secretary of the Vietnam Timber and Forest Products Association, said that companies exporting timber and timber products to the EU have been required to provide many types of documents for purchasing over the years partners so that they can explain and prove the legality of the origin of the raw wood to the EU authorities. Businesses are happy to be granted a FLEGT license so they don’t have to do a lot of paperwork.

“So far, most companies in the timber industry have adhered to the legal provisions on legal timber. However, it is not known when the new FLEGT license will be issued, making companies very impatient,” Hoai said.

Mr. Hoai reiterated that despite many immediate challenges, the implementation of the VPA/FLEGT agreement will bring long-term benefits to timber industry companies and recommended: Timber industry companies must quickly invest resources (human and financial) in improving production, working conditions and construction of capacities to meet the requirements of Decree 102.

“Companies must comply with all labor, environmental, social security and supply chain management regulations. This brings the new “FLEGT Green Passports” to the companies so that Vietnamese wood products can accelerate the market expansion in the EU and worldwide,” emphasizes Mr. Ngo Sy Hoai.