Timber Regulation: recent updates and developments
13 February 2017
Since coming into force in 2013, the EU Timber Regulation 995/2010 (“Timber Regulation”) has placed a due diligence obligation on businesses, requiring systems to be put in place to minimise the possibility that illegally harvested timber is placed on the EU market. This requires a risk assessment of the supply chain to evaluate the risk of illegally harvested timber being used. Factors such as supplier good standing, species of tree and location of the harvest must all be considered.
The extent of the obligations depend on your role in the supply chain, whether you are an “operator”, “importer” and whether the timber or timber products have been “placed on the market”. Also relevant is whether the timber product benefits from any exemptions. For example, packaging to “support, protect or carry” another product is not covered by the Timber Regulation but packaging placed on the market in its own right is caught.
Broadly the Timber Regulation is potentially relevant to any business involved in the import of items such as wood, wood chips, boxes or other paper materials. For example, the Timber Regulation should be considered in the following scenarios:
- a manufacturer importing paper from a non-EU country for use in the manufacture of exercise or similar items of stationery;
- a retailer importing paper products for use in its business;
- a timber merchant importing particle board from a non-EU supplier;
- a forest owner felling trees who then either processes in a sawmill or sells to customers; or
- an energy company buying wood chips from a non-EU country for use in the generation of energy.
Potential amendments to the scope of the Timber Regulation
There are now proposals at EU level to consider increasing the categories of products that fall within the Timber Regulation. On 23 January 2017, the European Commission (“EC”) published its conclusion that, following its evaluation of the Timber Regulation, the current product scope is not optimal as not all products containing wood are included. It found that many items such as newspapers, books, manuscripts, coffins and seats with wooden frames are out of scope. The EC therefore concluded that there is a risk that illegally harvested timber and timber products are still being placed on the European market. To address this, it is has announced plans to assess the product scope and determine whether changes are required. It is expected that this will take place in mid to late 2017 and will involve targeted and open public consultations with all relevant stakeholder groups. The draft proposal will also be made available online and subject to public feedback.
Agreement reached with Vietnam
In the meantime, specific measures are due to come into force in the near future with the aim of combatting illegal logging in Vietnam and ensuring that timber imported into the EU from Vietnam is from legal sources. The Forest Law Enforcement, Governance and Trade Voluntary Partnership Agreement (“VPA”) was finally agreed in November 2016 between the EU and Vietnam, relating to the import of Vietnamese timber and timber products into the EU. The VPA is now subject to final review and ratification, after nearly 6 years of negotiations.
Once the VPA is in force, shipments of timber and timber products from assured sources in Vietnam will be accompanied by a FLEGT licence confirming the legal origin. Such licensed products will automatically meet the requirement of the Timber Regulation and can be placed on the EU market without being subject to the due diligence requirements set out in the Timber Regulation.
This is a welcome development as it should lighten the regulatory burden on businesses looking to bring timber/timber products into the EU. Vietnam is one of 15 countries that are negotiating VPAs with the EU, including Thailand, Laos and Democratic Republic of the Congo. Countries such as Cameroon, Ghana and Indonesia are currently implementing VPAs.
Effect of Brexit on the Timber Regulation
The Timber Regulation is directly applicable, as a regulation, in all Member States of the EU without any implementing legislation. As such, it falls to the UK Government to “convert” it into UK law when the UK leaves the EU, along with other EU regulations such as REACH. The Timber Regulation will remain in force until the UK formally leaves the EU. Based on the current timetable, it is expected that this will be in 2019.
The UK has been instrumental in FLEGT licensing, providing both human and financial support to the licensing process, including the negotiations of VPAs. Brexit will mean that the UK will have no formal role in the future negotiation of VPAs, which are negotiated with the EU, not individual Member States.
Questions therefore arise as to what this means for timber products covered by existing VPAs. On leaving the EU, the UK will no longer bound by the VPAs, including the recent VPA entered into between Indonesia and the EU.
Enforcement is carried out at Member State level and it is fair to say that the UK has been active in enforcing the Timber Regulation. For example, in 2016, 19 UK importers of timber from Cameroon were investigated. After an examination of their due diligence systems and site visits, 14 importers received written warnings and notices of remedial action, requiring them to take measures to secure compliance with the Timber Regulation. Given the UK’s enforcement activity and the costs involved by the sector in reaching compliance, many believe that it is unlikely that the UK will adopt divergent timber legislation.
Wider regulatory obligations
As well as the obligations under the Timber Regulation, there may be additional regimes that will place labelling, registration and compliance obligations on businesses.
For example, if timber products are treated with preservatives, then this may create additional obligations under EU biocides or chemicals legislation. It may also impact the waste classification and your obligations for the handling and disposal of waste treated wood.
If your products falls within the Construction Products regime, then there will be CE marking and labelling obligations. If packaging is caught, then there are specific regulations covering composition and essential requirements.
All of the above will be in addition to any obligations under the Timber Regulation.