EUTR – the supplier’s perspective

Timber suppliers outside Europe still have concerns about the EU Timber Regulation, but they’re working hard to ensure compliance, says Malaysian Timber Council London director Sheam Satkuru-Granzella  

"Timber industries worldwide are committing to trading only in legal and/or sustainably produced timber to combat the illegal timber trade and satisfy increasingly environmentally aware consumers.  This bodes well for supplier countries like Malaysia, which have invested heavily in third-party independent forest certification and implementing sustainable forest management. But how will these countries be impacted by the impending EU Timber Regulation (EUTR), prohibiting first placing of illegal timber on the EU market?

It is widely agreed that illegal logging must stop and there are increasing international efforts to achieve that end. Such measures will help ensure that market players compete on a level playing field and that revenues from legal timber trade are available to reinvest in sustainable forest management strategies.  Consequently Malaysia, for one, fully supports the introduction of the EUTR, which, if implemented properly, has the potential to make a significant contribution to combating the illegal timber trade.

But will it work?  We believe it can, provided it is uniformly applied across the EU with fairness and transparency, does not become a burden on suppliers and importers of tropical timber products, or create trade barriers.  With that in mind, the debate on risk assessment and the extent to which due diligence has to be exercised needs resolution. The process of drafting the implementing regulation saw some dissent amongst stakeholders due to a lack of consultation. And there is a range of opinion on how various categories of illegality risk should be measured under the Regulation, complicating the application of due diligence risk assessment for timber buyers.  However, credit must be given to the drafters, who do seem to have left sufficient flexibility to cater for varying scenarios and circumstances.

Another key question is whether the EUTR has been sufficiently communicated to supplier countries.  From the start, the MTC has kept its industry members abreast of developments, but the most critical period is now. The recent completion of the implementing regulation and drafting of secondary legislation/guidelines mean that the Regulation’s detail   has only just become available, so we must now undertake further extensive communication with industry members to prepare them for its introduction next March. We are also working with colleagues at European timber federations to achieve further clarity.

Supplier countries have other outstanding concerns. While we’re confident that primary and some semi-finished products can easily comply with the EUTR, the picture is more complex for value-added and panel products, paper and finished goods such as furniture, which could comprise a mix of species from several regions. Fears remain that satisfying the Regulation for these products will increase administrative and financial burdens for suppliers. There may also be cases where the full supply chain is broken, making it impossible to fulfill EUTR requirements.  The proportion of non-compliance and region of origin will perhaps help determine risk levels involved.  

The pressure is now on our industry to ensure that all outstanding issues are addressed and that our timber sources are inventoried and accounted for, and most importantly, are legal (and increasingly sustainable too).  Malaysia’s timber sector has trading relationships with Europe spanning over 50 years and established a reputation for reliability and supplying quality materials. We are intent on these relationships continuing after the introduction of the EUTR."