January 2001

Meeting of the Timber Trade Federation Top Ten Forum
House of Commons
9th February 2001

ELIMINATING POVERTY:
THE ROLE OF SUSTAINABLE FORESTRY MANAGEMENT
Keynote Speech by George Foulkes MP

INTRODUCTION

I am sure I do not need to convince you of the importance of forests to life on earth and the enormous range of goods and services they provide. Forest and forest industries support the livelihoods of millions of people.

I would like to talk about the important role that sustainable forest management and forest industries could play in the elimination of poverty throughout the world.

THE CHALLENGE OF POVERTY

Despite economic growth, improved communications and enormous advances in technology - one in five people live in abject poverty and we continue to damage the natural environment. Most poor people live in South Asia and Sub-Saharan Africa - though pockets of abject poverty exist in many developing countries. Many of the poorest are women and children.

The poor are hungry; they suffer from ill-health; they lack productive assets and opportunities; they are marginalised, vulnerable and die young. It is unacceptable in this day and age that so many people live in abject poverty. This is why the primary purpose of the British Government's overseas development assistance is the 'elimination of world poverty'.

This Government has published two White Papers on what needs to be done to eliminate poverty. It has also vastly increased its expenditure on development assistance in line with its commitments.

The first White Paper - Eliminating World Poverty: A Challenge for the 21st Century - committed the Government to a series of International Development Targets. These cover a wide range of health, education, social and environmental objectives including that of halving the proportion of people living in absolute poverty by 2015 and to ensure that current trends in the loss of environmental resources are effectively reversed at both global and national levels by 2015.

These are challenging but worthy and achievable targets - if there is the will to do it and we work together.

The second White Paper was published in December last year - Eliminating World Poverty: Making Globalisation Work for the Poor. It reaffirms our commitment to the International Development Targets, sets out the opportunities and risks associated with the powerful forces of globalisation and describes how these forces might be managed to benefit the poor. The message is that globalisation is here to stay - but we can and must make it work for poor people.

THE ROLE OF FORESTS IN POVERTY REDUCTION

Over 2000 million people cook with firewood. The destruction of forests accounts for a quarter of green house gas emissions. 70% of poor people rely on traditional medicines the majority of which are harvested from forest areas. Forest protect watersheds and recycle nutrients. Forests contain up to a half of all terrestrial biological diversity.

In 18 African countries, forests contribute up to 10% of their Gross Domestic Product. The global demands for forest products are projected to grow by 50% over the next 20-30 years. At the recent meeting on Climate Change in the Hague one of the major disagreements was over the extent to which forests could and should act as 'carbon sinks' in stabilising the climate of the earth. - And yet we continue to lose 2% of forest cover every year.

While it is people that destroy forests, it is only through working with people whose livelihoods depend on forests and forest industries that we will sustain the vital supplies of goods and services they provide and improve the livelihoods of poor people.

However, different people, businesses and communities place different values on the goods and services provided by forests. This complicates the task of defining sustainable forest management. Sustaining what, for whom, where and who pays are critical questions - and alas corruption and irresponsible behaviour has accelerated wasteful forest destruction in many parts of the world.

It is now generally accepted through the work of the International Tropical Timber Organisation, the UN Inter-governmental Panel on Forests, the Intergovernmental Forum on Forests and the Food and Agricultural Organisation, that sustainable forest management can only be defined at local and national levels. There is a consensus that the criteria used for assessing sustainability must take account of economic, social and environmental dimensions and values.

It is the responsibility of Governments to design and implement National Forest Programmes and to set national standards for sustainable forest management. It is the role of donor agencies to work with developing countries and together to promote understanding, commitment and action at local and national levels. To this end, DFID currently spends about £30million a year on forestry programmes. DFID also works with the private sector and civil society at national and international levels to create a policy environment that supports sustainable forest management. We are working closely with the World Bank as it revises its Forest Strategy.

There are some that argue that sustainable forest management must be supported by an international legal instrument or 'convention'. But there is no consensus that a convention is needed and without positive international support such an instrument would not be effective. The resolution of this issue is one of the tasks that awaits the UN Forum on Forests that starts work later this year.

As with many sensitive issues, the UK should lead by setting a good example at home and abroad, and through sharing its experience with others. The UK Forest Standard, and the active engagement by the Forestry Commission on European and international issues are examples of good practice.

The UK industry and Timber Trade Federation have an excellent record in setting high standards for the UK industry through the Woodmark programme and its work to encourage a constructive attitude to timber through the Forests Forever Programme.

We have all learnt to respect consumer concerns over safety - environment standards, or the 'fairness' of trading systems. We are also aware of the concerns of many developing countries that we seek to erect 'non-tariff' barriers to trade, thereby restricting their access to our markets. This is not so, but we need to help developing countries respond to these challenges. We believe also that we should encourage market-based, voluntary certification schemes to provide consumers with the reassurance that the products they purchase come from sustainably managed sources.

Many of the campaigns on forest issues run by UK and international NGOs have made considerable contributions to raising public awareness and concerns over bad practice, false claims and corruption. However, some of these campaigns have been in danger of throwing out the 'baby with the bath water' and being 'anti-development'. We are keen to work with both the industry and civil society to develop fair and effective approaches.

TRADE, CORRUPTION AND FORESTRY

The complexity of issues associated with forestry and the impact of land use policies, population pressures and other influences outside the forest sector means that the ultimate fate of forests will be heavily determined by what happens in other sectors and international agreements. Because the causes of deforestation are many and complex it is unlikely that there will be a single solution. It will be a case of - every little helps --- or hinders.

I would like to focus on the role that trade could play in promoting sustainable development and poverty elimination.

The major proportion of timber and forest products are processed and traded locally. But it is more than likely that the volume and value of trade in tropical forest products will grow in future years to meet increasing demand.

It is also likely that the markets for forest goods and services will show growing interest in how forests are managed and how the benefits of good management are distributed. Tourism, the worlds largest and fastest growing industry, is adding to the numbers of those interested.

It is clear that forestry is particularly vulnerable to corrupt practices that reduce the value and distribution of benefits from forests and sustainable forests management to the people of the developing world. This in turn reduces the enthusiasm and incentives to all stakeholders to work for sustainable forest management.

A recent study in Indonesia that DFID funded with the European Commission calculated that between 50-70% of round wood is from unrecorded or illegal sources, resulting in the loss of revenue of about US$2.2 billion - the equivalent of 14.3% of Indonesia's non oil/gas revenues. Illegal logging and trade in illegally logged products was one of the priorities of the G8 Forestry initiative and discussions at the last G8 Summit in Okinawa. DFID will cosponsor - later this year - a high-level conference in South East Asia on Forest Law Enforcement - together with the World Bank and US Government. Because what is legal/illegal is defined domestically, this respects national sovereignty over environmental resources - and complements the market-based drive towards certification of sustainable forest management.

I know that the issues of certification and labelling are contentious. There are those who argue that the costs of certification are disproportionate and will further disadvantage timber and forest products in the market place and in respect to their less environmentally friendly competitors. But it is in our interest that forests are managed in sustainable ways. Like globalisation - I think that labelling and certification are here to stay. Consumer pressure is there and those who move quickly will benefit from consumer confidence and loyalty. However, the standards to be met by any certification and labelling scheme should be clearly stated and open to scrutiny or audit.

The Government is, as I said before, in favour of voluntary market-based certification schemes to give consumers choice. But the Government is also a major purchaser of timber and timber products. We have the responsibility to ensure our own house is in order. Guidelines already exist to encourage Government Departments to purchase from legal and sustainable sources - however, we can - and should - do more.

Following the agreements reached at the G8 Summit, it is now mandatory on central government departments to seek to buy timber and timber products from sustainably managed and legal sources. Each department must now report annually on its timber purchases and the assurances it has received from the source of supply.

It is not possible under the relevant EC Directives, for Government to recommend only 'independently certified sources'. As you will be aware the amount of 'certified' timber on the market is small; however, it is likely to grow.

CONCLUSION

Sustainable forest management, while complex, will bring a wide range of commercial, social and environmental benefits to poor people and ensure the future health of the timber industry. It is a goal that is well worth all of us striving for.

This will increase the demand for market-based, transparent and credible certification and labelling schemes and protect the future of the timber industries.

DFID will continue to give priority to helping developing countries to develop their own national forest plans and process. It will encourage the involvement of local communities at all stages and levels in the development and implementation of these plans.

DFID will also help to address the problem of corruption at national and international levels - not only in forest industries but also across the whole of government actions.

To make progress we will need to work with partners in the public and private sectors and internationally with the UN and World Bank.

We value our working relations with the Timber Trade Federation and look forward to continuing to working with you in the future.